Futures rise on gains in Intel, coronavirus fears linger

[January 24, 2020]  By Sruthi Shankar

(Reuters) - U.S. stock index futures edged higher on Friday, as a strong forecast from chipmaker Intel and encouraging business activity data out of Europe lifted the mood as investors tracked latest developments related to the coronavirus outbreak.

Intel Corp <INTC.O> jumped 5.2% in premarket trading, on course to open at a 19-year high, after it forecast better-than-expected 2020 earnings, joining many of its peers to signal a recovery in chip demand.

Advanced Micro Devices <AMD.O> rose 1.5%, while Broadcom Inc <AVGO.O> gained 3.5% after entering an agreement with Apple Inc <AAPL.O> for the supply of wireless components used in its products.

While China ramped up measures to contain a virus that has killed 26 people and infected more than 800 in the past week, investors took relief from the World Health Organisation declaring the new coronavirus an emergency just for China and stopping short of declaring the epidemic of international concern.

Concerns about infections spreading as many Chinese travel for the Lunar New Year have taken a toll on risky assets this week, particularly travel, hotel and airline stocks.

"While the severity of the economic impact is unknown, it is likely to be short-lived should it follow the pattern of historical cases," said Aneeka Gupta, associate director of research at WisdomTree.

Walt Disney Co <DIS.N> slipped 0.5% after the company said its Shanghai Disney Resort will be closed until further notice in the wake of the virus outbreak.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 9, 2020. REUTERS/Brendan McDermid

The risk-on mood was supported by a slew of PMI data that signaled some recovery in eurozone growth this year.

A report from Markit Economics is expected to show an index of U.S. manufacturing activity inched up to 52.5 in January from 52.4 in the previous month, while the services sector index likely rose to 52.9 in January from 52.8 in December.

At 7:28 a.m. ET, Dow e-minis <1YMcv1> were up 70 points, or 0.24%. S&P 500 e-minis <EScv1> were up 6.25 points, or 0.19% and Nasdaq 100 e-minis <NQcv1> were up 25.5 points, or 0.28%.

In other movers, credit card issuer American Express Co <AXP.N> rose 2.5% after reporting a better-than-expected quarterly profit as more people used its cards for shopping and paying bills.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

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