Futures slump on alarm over fast-spreading virus
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[February 27, 2020] By
Medha Singh
(Reuters) - U.S. stock index futures
dropped more than 1% on Thursday as investors stayed away from making
riskier bets after the rapid spread of the coronavirus outside China
deepened worries about growth and corporate earnings.
The number of new infections in China, the source of the outbreak, was
overtaken for the first time by fresh cases elsewhere on Wednesday, most
notably in Italy and Iran.
Adding to worries, the U.S. Centers for Disease Control and Prevention
confirmed an infection in California in a person who reportedly did not
have relevant travel history or exposure to another known patient.
"In the recent week, markets have come to realize that the outbreak is
much worse and are now realistically pricing in the impact of the virus
on the economy," said Philip Marey, senior U.S. strategist at Rabobank.
"In that sense it's a bit of a catching up from the relative optimism
that was there in the beginning when markets thought (the virus) will be
contained to China with some minor outbreak outside."
Rising fears of a pandemic, which U.S. health authorities have warned is
likely, have erased about $1.84 trillion off the benchmark S&P 500
<.SPX> this week alone.
Industry analysts and economists continued to sound the alarm as they
assessed the impact of the coronavirus, with Goldman Sachs saying U.S.
companies will generate no earnings growth in 2020.
Bank of America slashed its world growth forecast to the lowest level
since the peak of the global financial crisis.
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Traders work on the floor of the New York Stock Exchange shortly
after the opening bell in New York, U.S., February 26, 2020.
REUTERS/Lucas Jackson
At 7:43 a.m. ET, Dow e-minis <1YMcv1> were down 366 points, or 1.36%. S&P 500
e-minis <EScv1> were down 40.5 points, or 1.3% and Nasdaq 100 e-minis <NQcv1>
were down 134.25 points, or 1.52%.
All the 30 blue-chip components of the Dow Jones Industrials <.DJI> were trading
in the red, with Microsoft Corp <MSFT.O>, Apple Inc <AAPL.O> and Visa Inc <V.N>
down between 2.6% and 3.3%. Gilead Sciences <GILD.O>, however, jumped 6.4% as
the drugmaker said it had started two late-stage trials to test its experimental
antiviral drug, remdesivir, in patients with cases of illness caused by
coronavirus.
Benchmark 10-year U.S. Treasuries fell to record lows, while gold rose 0.5%. Oil
prices slid to their lowest in more than a year on fears of lower demand. [US/]
[GOL/] [O/R]
The S&P 500 <.SPX> fell for a fifth straight session on Wednesday as investors
worried about the impact of the crisis on global supply chains, which have
already been bruised by drastic containment measures in China.
(Reporting by Ambar Warrick and Sagarika Jaisinghani in Bengaluru; Editing by
Sriraj Kalluvila and Anil D'Silva)
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