Wednesday June 17th

17-06-2020

Dow futures drop 200 points, airlines and retailers slide

U.S. stock index futures were lower on Thursday as investors weigh the rising number of coronavirus cases in the U.S. and around the world. Futures on the Dow Jones Industrial Average fell 203 points, or 0.8%. S&P 500 futures slid 0.7%. Nasdaq 100 futures were down by 0.3%. Airlines, retailers and cruise lines led the early declines. United Airlines fell by 4.2%. Delta and American dropped 3.3% and 3.7%, respectively. Nordstrom and Kohl’s both slid more than 2%. Carnival, Norwegian Cruise Line and Royal Caribbean traded lower by 7.2%, 5.4% and 4.2%, respectively. Several states in the U.S. are experiencing a resurgence of infections. Arizona reported a record-high number of new confirmed cases, while Texas saw an 11% daily spike in hospitalizations for patients with Covid-19 on Wednesday. In China, the country’s capital city has reportedly closed schools and canceled flights to contain the latest wave of coronavirus cases. However, a disease expert in China announced the latest outbreak of coronavirus cases in Beijing had been brought under control. “We believe the market is pricing in quite a bit of good news and the rally is likely to take a breather in coming months as the recovery evolves,” Scott Wren, Wells Fargo’s senior global market strategist, said in a note. “We expect volatility in the coming months as we gauge how the reopenings are going and how consumer spending is progressing.” Initial U.S. weekly jobless claims rose more than expected last week, coming in at 1.508 million. Economists polled by Dow Jones expected a print of 1.3 million. The Dow and the S&P 500 snapped their three-day winning streak on Wednesday as stocks directly linked to a successful reopening underperformed, including airlines and cruise line operators. The tech-heavy Nasdaq Composite eked out a small gain, lifted by popular growth names such as Amazon and Netflix. While the market remained choppy, major stock averages are set to post solid gains this week after a sharp pullback in the week prior. The 30-stock Dow and the S&P 500 have gained more than 2% each this week so far, while the Nasdaq has risen about 3.3%. Stocks in Asia Pacific were mixed on Thursday as investors continued to weigh the implications of a recent uptick in coronavirus cases. In Japan, the Nikkei 225 dipped 0.45% to close at 22,355.46 while the Topix index declined 0.25% to end its trading day at 1,583.09. South Korea’s Kospi also slipped 0.35% to close at 2,133.48. Hong Kong’s Hang Seng index closed fractionally lower at 24,464.94. Shares of Chinese e-commerce giant JD.com jumped in their Thursday Hong Kong debut, rising more than 3% as compared to the issue price. Mainland Chinese stocks nudged higher on the day, with the Shanghai composite gaining 0.12% to around 2,939.32 while the Shenzhen component added 0.645% to about 11,494.55. Oil prices ticked up on Thursday after U.S. oil product stocks shrank, providing bulls with ammunition ahead of a meeting between OPEC producers and their allies to discuss their future output strategy. Brent crude futures were up 46 cents at $41.17 a barrel. West Texas Intermediate crude futures rose 29 cents to $38.25 a barrel. Both benchmarks were down about 2% earlier in the session. Gold prices rose on Thursday, as fears that new coronavirus cases could impede economic recovery bolstered demand for the precious metal and weighed on riskier assets. Spot gold was up 0.3% at $1,731.88 per ounce, having earlier hit a near one-week high of $1,736.49. U.S. gold futures rose 0.5% to $1,744.80 per ounce.