U.S. stock-index futures on Monday were modestly higher, pointing to a positive start for the week after a brutal selloff on Friday. The bounce comes as equity indexes in China suffered their worst daily declines in years — in the first trading session for Chinese markets since the spread of the coronavirus gained steam in late January.
How are major indexes faring?
Futures for the Dow Jones Industrial Average YMH20, +0.40% were up 135 points, or 0.5%, at 28,302, while S&P 500 futures ESH20, +0.45% climbed 17 points, or 0.5%, to 3,241. Nasdaq-100 futures NQH20, +0.51% were up 51.75 points at 9,049.50, a gain of 0.6%.
On Friday, the Dow DJIA, -2.09% shed 603.41 points, or 2.1%, to settle at 28,256.03. The S&P 500 SPX, -1.77% lost 58.14 points, or 1.8%, ending at 3,225.52. The Nasdaq Composite Index COMP, -1.59% retreated 148 points, or 1.6%, closing at 9,150.94.
The Friday selloff left the Dow with a 1% January decline, while the S&P 500 saw a monthly decline of 0.2%. The technology-heavy Nasdaq index held on to a 2% gain for January.
What’s driving the market?
U.S. stocks were attempting to rebound to start the week but the specter of an Asian influenza that has thus far claimed at least 361 lives and infected more than 17,000 people looms large in China and has commanded the attention of domestic investors.
Overnight Monday, Chinese stocks plunged on their first day of trading since Jan. 24, the start of an extended Lunar New Year holiday that coincided with the rapid spread of the illness, which has drawn comparisons with the outbreak of severe acute respiratory syndrome, or SARS, beginning in 2002.
The Shenzhen Composite 399106, -8.41% dropped 8.4%, while the Shanghai Composite SHCOMP, -7.72% fell 7.7%, marking the worst daily tumble for that index since 2015. Chinese equity markets had been closed since Jan. 24 for the New Year holiday.
Investors had been bracing for a sharp slide in Chinese equities due to anticipation of a pent-up desire to reprice Asian equities in the wake of the viral outbreak that has limited the movement of tens of millions of people in China and caused a number of businesses to temporarily shutdown in Wuhan City, where the virus reportedly first originated.
“The Chinese central bank provided assistance to the markets in the form of a liquidity boost, but it didn’t do much to reassure confidence,” wrote David Madden, market analyst at CMC Markets UK, in a Monday research report.
The People’s Bank of China said it would inject about $173 billion into the economy to stem the economic downturn, along with other measures to stabilize the economy.
On Friday, the Dow and S&P 500 erased their year-to-date gains after President Donald Trump late Friday declared a U.S. public-health emergency in response to the coronavirus outbreak in China, ordering up to a 14-day quarantine for citizens returning from China’s Hubei province and denying entry to some foreigners.
Looking ahead, the Institute for Supply Management will provide data on the health of manufacturing activity for January at 10 a.m. Ahead of that, at 9:45 a.m. Eastern, Markit will release its January purchasing managers index for the manufacturing sector.
Meanwhile, investors are also keeping an eye on developments tied to the 2020 presidential election, with the closely watched Iowa Caucus set to for later Monday.
Which stocks are in focus?
Alphabet Inc., the parent of Google Inc. GOOG, -1.48% GOOGL, -1.48%, is slated to report after the closing bell Monday, with investors looking for revenue from the search giant beyond advertising. YouTube and self-driving subsidiary Waymo are the most promising revenue sources.
Shares of Gilead Sciences Inc. rallied 4.7% in premarket action, after reports the pharmaceutical company will test a new antiviral drug for effectiveness in treating Coronavirus.
U.S.-trade shares of Baidu Inc. BIDU, -1.73% were up 3% before the start of trade, after the company raised its fourth-quarter guidance.
How are other markets trading?
Government bond yields were ticking higher, with the yield of the 10-year U.S. Treasury note TMUBMUSD10Y, +2.60% up about 3 basis points to 1.54%.
Oil prices were trading near unchanged. The price of a barrel of West Texas Intermediate crude for March delivery CLH20, -0.10% fell less than 0.1% to $51.55. In precious metals, the price of GCJ20, -0.25% ell 0.3% to about $1584 an ounce.
The U.S. dollar DXY, +0.29% gained 0.3% relative to a basket of six rivals.
In Europe, stocks ticked higher, with the Stoxx Europe 600 SXXP, +0.05% up 0.1%.
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February 03, 2020 at 07:31PM
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Dow futures signal bounceback after Friday selloff, China market rout - MarketWatch
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