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Stock-index futures pointed to a higher start for U.S. equities Tuesday, a day after growing worries about the impact of China’s coronavirus outbreak on global economic growth sparked the biggest one-day selloff since early October.
Investors were also set to wade through a tide of quarterly results from a number of high-profile companies as earnings reporting season picks up steam.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YMH20, +0.43% were up 134 points, or 0.5%, to 28,618 while S&P 500 futures ESH20, +0.60% gained 20 points, or 0.5%, to 3,259. Nasdaq-100 futures rose 0.8%, to 9,032.
The Dow DJIA, -1.57% dropped 453.93 points Tuesday, a decline of 1.6%, to end at 28,535.80, while the S&P 500 SPX, -1.57% shed 51.84 points, or 1.6%, to end at 3,243.63. It was the biggest decline for both indexes since Oct. 2. The Nasdaq Composite ended at 9,139.31, down 175.60 points or 1.9% — its biggest-one day fall since Aug. 23.
What’s driving the market?
“The virus-related uncertainty that plagued global markets in recent days started to abate on Tuesday,” with stock-index futures pointing to a slightly higher start and the Japanese yen, a traditional have, unable to extend recent gains, said Marios Hadjikyriacos, investment analyst at XM, in a note.
“Admittedly though, this recovery in sentiment seems fragile at best, considering that American stocks fell by nearly 1.6% yesterday and that the yen is still substantially higher this week,” Hadjikyriacos said.
Chinese authorities on Tuesday said deaths from the viral disease rose by 25 to at least 106, while the number of confirmed cases in China rose to 4,515.
China’s already weakening economy is set to take another hit with businesses across the country remaining shut for an extended public holiday and tourism grinding to a halt, as authorities struggle to contain the pneumonia-like coronavirus that has spread across the nation, the South China Morning Post reported.
See: U.S. warns against nonessential travel to China as coronavirus death toll tops 100
Investors are also digesting U.S. corporate earnings reports Tuesday. Of the S&P 500 companies that have reported thus far, 67% have posted better-than-expected earnings, FactSet data shows. Apple is among the S&P 500 index components set to report after Tuesday’s close. Apple suppliers cautioned coronavirus could impact the phonemaker’s planned production hike.
See: Apple earnings: A year after holiday misfire, Apple is worth twice as much
What’s on the economic calendar?
In U.S. economic data, December durable goods orders surged 2.4% in December owing to military purchases, but business investment in the civilian part of the economy declined again to finish the year on a weak note. Economists surveyed by MarketWatch had forecast a 0.3% decline in orders. Excluding defence spending durable goods orders sank 2.5% and the government revised orders for November to show an even bigger 3.1% drop. The weakness in orders and business investment could be a drag on the economy in 2020 unless it turns around.
The Case-Shiller read on U.S. national home prices is due at 9 a.m. Eastern, while a January consumer confidence index is due at 10 a.m. Eastern.
Which companies are in focus?
Shares of Dow component 3M Co. MMM, -1.41% were down 1.5% in premarket trade, after the consumer and industrial products company reported fourth-quarter profit that fell short of Wall Street expectations, while revenue matched. 3M also said it was cutting 1,500 jobs as part of a restructuring.
Shares of another Dow component, United Technologies Corp. UTX, -1.41%, were little changed in premarket trade, after it reported profit and sales that beat estimates.
Pfizer Inc. PFE, +0.85% shares were down 1.6% ahead of the opening bell after the drugmaker reported profit that missed expectations, while revenue rose in line with forecasts.
Xerox Holdings Corp. XRX, -1.32% shares rose 3% in premarket trade after delivering a fourth-quarter profit that topped expectations.
What are other markets doing ?
Oil futures edged higher Tuesday, steadying after falling to morethan a threemonth low to start the week on fears China’s coronavirus outbreak could dent global demand for crude. West Texas Intermediate crude for March delivery CLH20, +0.41% on the New York Mercantile Exchange rose 30 cents, or 0.6%, to $53.44 a barrel.
European stocks were trading around seven-week lows on Tuesday, as concerns about the spreading coronavirus continue to rattle markets. After ending Monday with the biggest one-day drop in nearly four months, the Stoxx Europe 600 SXXP, +0.40% fell 0.01% to 414.03.
Asian shares skidded again Tuesday on deepening worries over the expanding outbreak of a new virus in China. Markets in Hong Kong and mainland China were closed Tuesday for Lunar New Year holidays, while South Korea’s 180721, -3.09% benchmark tumbled 3.2% as it reopened after its own holidays. Japan’s Nikkei 225 index NIK, -0.55% lost 0.9%. China has extended its national holiday by three days so that offices should reopen on Monday. Shanghai’s holiday was extended until Feb. 9.
