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Tensions between the world's two biggest economies over the
origin of the novel coronavirus, which had slowed a Wall Street
rally this month, rose to the forefront after U.S. Secretary of
State Mike Pompeo on Wednesday further criticized Beijing's
handling of the outbreak.
"Investors are concerned that the reopening optimism is starting
to fade and focus shifts back to the world's two largest
economies," said Edward Moya, senior market analyst at OANDA.
"Everyone is focused on where the narrative is going to go
between China and the United States with both pointing fingers
as far as who is responsible for the handling of the coronavirus
and also to living up to the phase one trade deal."
Weak earnings from popular retailers also undercut optimism over
economic recovery, with Macy's Inc <M.N> edging lower in
premarket trade after forecasting a quarterly operating loss of
up to $1.11 billion due to store closures amid virus-related
lockdowns.
Best Buy Co Inc <BBY.N> dropped 3.4% as the electronics retailer
reported a 5.3% fall in quarterly same-store sales due to the
virus, while L Brands Inc <LB.N> posted worse-than-expected
quarterly results.
Data from the Labor Department showed that more than 2.4 million
Americans applied for unemployment benefits over the past week,
down from the previous reading of 2.7 million.
Claims have gradually declined since hitting a record 6.9
million in the week ended March 28, and Thursday's report could
offer early clues on how quickly businesses re-hire as they
reopen.
At 7:52 a.m. ET, Dow e-minis <1YMcv1> were down 114 points, or
0.46%. S&P 500 e-minis <EScv1> were down 13.75 points, or 0.46%
and Nasdaq 100 e-minis <NQcv1> were down 31.5 points, or 0.33%.
The benchmark S&P 500 <.SPX> closed at a 2-1/2 month high on
Wednesday, more than 35% above lows hit in March. Markets are
watching for the index to breach 3,000 points, which analysts
believe could help restore some confidence and invite more money
into equities.
Take-Two Interactive Software Inc <TTWO.O> dropped 4.0% after
the videogame publisher's forecast for full-year revenue fell
short of expectations.
(Reporting by Ambar Warrick and Medha Singh in Bengaluru;
Additional reporting by Pawel Goraj in Gdansk; Editing by Anil
D'Silva)
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