Wall Street set to recover after turbulent Monday

By Sruthi Shankar

(Reuters) – U.S. stock indexes were on track to recover on Tuesday after the S&P 500 suffered its worst day in nearly four months in the previous session on fears that a coronavirus outbreak could hit global economic growth.

Markets across the world stabilized as the head of the World Health Organisation said he was confident in China’s ability to contain the virus outbreak that has killed 106 people, prompted businesses to close operations and curbed travel.

U.S. economy and markets are not susceptible to a major slowdown due to the virus outbreak because they are more domestically focused, but share prices could falter in the near-term, Citi analyst Tobias Levkovich said in a note.

Investors will keep a close watch on Apple Inc (O:) results, due after markets close. Asian Review reported that the company’s plans to ramp up iPhone production by 10% in the first half of this year may hit a roadblock as the coronavirus spreads across major markets like China.

Its shares were up 1% in premarket trading after falling about 3% on Monday amid a broad-based pullback in U.S. stocks.

At 7:24 a.m. ET, were up 112 points, or 0.39%. S&P 500 e-minis rose 17.75 points, or 0.55% and gained 68.5 points, or 0.76%.

U.S. industrial giant 3M Co (N:) slid 2.3% after it forecast 2020 profit below expectations and narrowly missed quarterly revenue estimates, as it faced sluggish demand in Asia.

Earnings are now expected to show a decline of 0.5% for the fourth quarter, according to Refinitiv data. Of the 87 companies that have reported though Monday, 67.8% have topped expectations, below the 74% rate from the past four quarters.

Pfizer Inc (N:) fell 1.6% after posting a lower-than-expected quarterly profit on disappointing sales of breast cancer drug Ibrance.

The Fed officials will gather for the first policy meeting of the year on Tuesday, and markets do not expect the central bank to change its benchmark overnight lending rate at the end of the meeting on Wednesday.

Data on durable goods orders for December and January consumer confidence are due later in the day.

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