Stock futures point to rebound as China seeks to curb virus impact

[February 03, 2020]  By Medha Singh

(Reuters) - U.S. stock index futures climbed on Monday, following steep declines in the previous session, as China took steps to relieve pressure on its economy from the impact of the coronavirus epidemic.

The country's central bank cut reverse repo rates by 10 basis points and injected 1.2 trillion yuan ($171 billion) to limit the damage from travel curbs and business shut-downs on the economy.

However, that could not stop a near 8% plunge in Chinese <.CSI300> stocks as investors played catch-up after an extended Lunar New year holiday.

Fears surrounding the spread of coronavirus, which has been declared a global emergency, had led the S&P 500 <.SPX> and the Dow Jones Industrials <.DJI> to record on Friday their worst weekly losses in at least five months.

The uncertainty following the virus outbreak has pulled the benchmark S&P 500 down about 3% since Jan. 21, when the first case was reported in the United States, and has overshadowed fourth-quarter earnings season.

Shares of drugmaker Gilead Sciences Inc <GILD.O> rose 3.7% in premarket trading after the company said it has provided its experimental Ebola therapy for use in a small number of patients with the coronavirus in China.

Meanwhile, Apple Inc <AAPL.O> slipped 1.2% as the iPhone maker shut all of its official stores and corporate offices in mainland China until Feb 9.

At 7:23 a.m. ET, Dow e-minis <1YMcv1> were up 96 points, or 0.34%. S&P 500 e-minis <EScv1> were up 13 points, or 0.4% and Nasdaq 100 e-minis <NQcv1> were up 38.75 points, or 0.43%.

Traders work at the New York Stock Exchange (NYSE) in New York, U.S., January 31, 2020. REUTERS/Bryan R Smith

Alphabet Inc <GOOGL.O> is due to report four-quarter results after markets close, while Walt Disney <DIS.N>, General Motors <GM.N> and Kellogg Co <K.N> will post results later this week.

About 70% of the 126 S&P 500 companies that have reported quarterly results so far, have topped earnings estimates.

Shares of Nike <NKE.N> rose 1.5% after JP Morgan added the footwear maker's shares to their focus list, saying they view the recent pullback in its shares as a multi-year buying opportunity.

Investors will also keep an eye on Iowa caucuses on Monday, the first nominating contest of the 2020 presidential election.

On the economic front, manufacturing PMI data from Markit Economics and Institute for Supply Management are due later this morning.

(Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur)

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