Futures surge after Biden's resurgence in Democratic primaries

[March 04, 2020]  By Medha Singh

(Reuters) - U.S. stock markets looked set to cheer a strong showing for Joe Biden in the Super Tuesday Democratic primaries on Wednesday, with Dow and S&P index futures rebounding around 2% from heavy losses a day earlier.

The benchmark S&P 500 index <.SPX> had closed down 3% on Tuesday after an emergency interest rate cut by the Federal Reserve amplified fears over the extent of the economic damage from the coronavirus outbreak.

The index has now declined in eight of the past nine sessions, bringing Wall Street's total losses to $3.1 trillion as the virus spreads deeper in the United States and Europe and cripples supply chains.

But at 7:23 a.m. ET, Dow e-minis <1YMcv1> were up 700 points, or 2.7%, after Biden, a moderate considered less likely to raise taxes and impose new financial regulations, won Texas and eight other states, setting up a one-on-one battle for the Democratic presidential nomination with Bernie Sanders.

S&P 500 e-minis <EScv1> were up 72.25 points, or 2.41% and Nasdaq 100 e-minis <NQcv1> were also up 206.75 points, or 2.41%.

"This is music to Wall Street's ears, who have less to fear from Biden's centrist policies than Sanders' socialist agenda," Raffi Boyadjian, senior investment analyst at XM, wrote in a note.

Shares of health insurers UnitedHealth Group Inc <UNH.N>, Centene Corp <CNC.N>, Humana Inc <HUM.N> and Cigna Corp <CI.N> surged between 4.6% and 9.2% in premarket trading.
 

A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., March 3, 2020. REUTERS/Andrew Kelly

The possibility of a Sanders nomination has hurt those stocks in the past few months as his "Medicare for All" proposal would eliminate private health insurance altogether.

General Electric Co <GE.N> rose 2.3% after the company forecast a hit of $300 million to $500 million to its first-quarter cash flow from the coronavirus outbreak, while reaffirming its cash and profit targets for the full year.

On the economic calendar, the ADP National Employment Report for February is due later in the day. The data is considered a precursor to the more comprehensive U.S. jobs report on Friday.

All eyes will also be on the Fed's beige book report, which will offer the first snapshot from the central bank's business contacts on how deeply the coronavirus is impacting the domestic economy.

(Reporting by Medha Singh in Bengaluru)

[© 2020 Thomson Reuters. All rights reserved.]

Copyright 2020 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.