Thursday February 13th

13-02-2020

Dow futures point to a loss of more than 150 points as reported coronavirus cases jump

U.S. stock index futures pointed to a lower open on Thursday as a jump in coronavirus cases fuels worries over the virus’ impact on economic activity. Around 7:07 a.m. ET, Dow Jones Industrial Average futures were down 200 points, indicating a loss of 177 points at the open. S&P 500 and Nasdaq 100 futures also pointed to solid losses. Cisco Systems was the worst-performing Dow stock, sliding nearly 5% in the premarket. Nike, Apple and Microsoft all fell at least 1%. China said it confirmed 15,152 new cases and 254 additional deaths. Those figures include the ones reported earlier by Hubei province under its new diagnosis methodology. That brings the country’s total death toll to 1,367 as the number of people infected jumped to nearly 60,000, according to the Chinese government. “With the upward revision to the number of those afflicted, the answer we should all give when asked about the full impact of this virus and when it goes away is ‘I don’t know,’” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. To be sure, the jump in cases may be due to the way Chinese authorities are counting them. Health authorities in Hubei province said Thursday that they changed the way they tabulate case totals — “clinically diagnosed” cases now count toward the “confirmed case” count, resulting in the sudden surge among the latter. The major averages are coming off a record-setting session after notching all-time highs as investors tried to shrug off the uncertainty around the coronavirus. The Dow jumped more than 200 points on Wednesday while the S&P 500 and Nasdaq climbed 0.7% and 0.9%, respectively. In corporate news, Cisco fell after the company reported another decline in overall revenue. In the fourth quarter, Cisco’s revenue dropped by 4% on a year-over-year basis. That decline overshadowed a better-than-expected profit. PepsiCo, Alibaba and Applied Materials all reported quarterly earnings that beat expectations. PepsiCo and Applied Materials rose slightly in the premarket, but Alibaba’s stock dropped more than 1%. On the data front, weekly jobless claims and U.S. inflation data are set for release at 8:30 a.m. Stocks in major Asian markets declined on Thursday as investors weighed a spike in the number of new coronavirus cases reported in China’s Hubei province due to a tweak in methodology. Mainland Chinese stocks reversed earlier gains and ended their trading day lower, with the Shanghai composite down 0.71% to about 2,906.07 and the Shenzhen component declining 0.7% to 10,864.32 while the Shenzhen composite fell 0.769% to around 1,771.61. Hong Kong’s Hang Seng index was 0.29% lower, as of its final hour of trading. In Japan, the Nikkei 225 fell 0.14% to close at 23,827.73 while the Topix index finished its trading day 0.34% lower at 1,713.08. Meanwhile, South Korea’s Kospi slipped 0.24% to finish its trading day at 2,232.96. Oil prices fell on Thursday after OPEC and IEA reports cut back demand forecasts for this year on the back of the coronavirus outbreak in China, the world’s biggest oil importer. Brent crude fell 34 cents, or 0.6%, to $55.45 per barrel. U.S. West Texas Intermediate fell 10 cents, or 0.2%, to $51.07 per barrel. Gold gained on Thursday after a sharp rise in new coronavirus cases and deaths in China dampened risk sentiment, prompting investors to buy the metal. Spot gold was up 0.4% to $1,571.70 per ounce. U.S. gold futures gained 0.3% to $1,576.90.