LDN - Business

Futures point higher after Wall Street's steepest plunge since 1987

[March 17, 2020] By Medha Singh

(Reuters) - U.S. stock index futures rose in volatile trading on Tuesday, a day after Wall Street's steepest fall since 1987, as drastic efforts to contain the coronavirus pandemic paralyzed parts of the economy and crushed business sentiment.

The benchmark S&P 500 <.SPX> erased all its gains from 2019 in the previous session as the Federal Reserve's dramatic move to cut interest rates to near zero added to worries about the economic fallout from the outbreak.

Monday marked the S&P 500's third-biggest daily percentage drop on record, beaten only by the 1987 rout and the Great Depression crash.

"It's becoming clearer that at its peak the COVID-19 impact on the global economy will likely be worse than the peak of the global financial crisis," said Jim Reid, a strategist at Deutsche Bank in Guildford, UK.

As governments in the United States and Europe start shutting restaurants and schools, as well as asking people to stay home, strategists are downgrading growth forecasts for the second quarter.

Some investors are going so far as to contemplate outcomes more dire than a recession, including several quarters of declining economic activity, a credit crisis or even a depression.

The three indexes have plunged about 30% from their record closing highs in mid February, ending the U.S. stock market's longest-ever bull run.

At 7:10 a.m. ET, Dow e-minis <1YMcv1> were up 453 points, or 2.22% and Nasdaq 100 e-minis <NQcv1> were up 192.25 points, or 2.72%. S&P 500 e-minis <EScv1> rose 57.5 points or 2.38%.

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Traders work on the floor of the New York Stock Exchange shortly after the opening bell as trading is halted in New York, U.S., March 16, 2020. REUTERS/Lucas Jackson

Big U.S. lenders ticked higher after announcing they would access funding from the Fed's "discount window".

Bank of America Corp <BAC.N>, Citigroup Inc <C.N>, Goldman Sachs Group Inc <GS.N>, JP Morgan Chase & Co <JPM.N>, and Wells Fargo & Co <WFC.N> rose between 3.0% and 4.6% in premarket trading.

Boeing <BA.N> gained 3% after the planemaker said it was in talks with senior White House officials and congressional leaders about short-term assistance for the entire U.S. aviation sector.

Shares of carriers American Airlines <AAL.O>, United Airlines <UAL.O> and Delta Air Lines <DAL.N> were up more than 2%.

In a bright spot for healthcare stocks, Pfizer Inc <PFE.N> gained 3% after the drugmaker signed a deal with Germany's BioNTech SE <22UAy.F> to co-develop a potential coronavirus vaccine.

Regeneron Pharmaceuticals Inc <REGN.O> jumped 14% after the company said it had identified antibodies to potentially treat COVID-19.

(Reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)

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