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US pre-open: Markets battered as coronavirus continues to spread

By Iain Gilbert

Date: Monday 24 Feb 2020

US pre-open: Markets battered as coronavirus continues to spread

(Sharecast News) - US futures had stocks recording some heavy losses at the open as the number of Wuhan coronavirus cases accelerated outside of China.
As of 1230 GMT, Dow Jones futures were down 2.55%, while S&P 500 and Nasdaq-100 futures had the indices opening 2.46% and 2.89% lower, respectively.

The Dow closed 227.57 points lower on Friday as new cases of the Wuhan coronavirus increased, adding to fears that a pronounced global economic slowdown was on the horizon.

Companies exposed to China took a hit in pre-market trading on Monday, with the likes of Delta, American and United Airlines all flying more than 2.5% lower.

Shares of Nvidia were down more than 6%, while fellow chipmakers Intel and AMD were down 3.5% and 7.2%, respectively. Apple was down 4.6% ahead of the bell.

Market participants were keeping a keen eye on developments surrounding the outbreak, which has now spread rapidly to the likes of South Korea and Italy - which officially became the most affected country outside of Asia, with more than 130 reported cases and three deaths.

South Korea raised its alert to the "highest level" as the total number of people infected topped 750 - making it the nation with the most cases outside of mainland China.

In response, the yield on the benchmark 10-year Treasury note fell to 1.397% on Monday, putting the key rate close to an all-time low, while gold futures climbed more than 2% to roughly $1,685 per ounce.

IG analyst Chris Beauchamp said: "The idea that the coronavirus has been fully contained has been firmly banished, and investors are now on notice to expect more cases and, sadly, more deaths.

"This means the economic forecasts of the impact, such as they are, will need to be revised, with a greater impact now to be expected. It is easy to get carried away, and the headlines do not make for pleasant reading, but it is important to remember that the selloff we are currently witnessing is the worst since October, for some markets, and since August for others."

On the macro front, the Chicago Federal Reserve's January National Activity Index will be released at 1330 GMT, while February's Dallas Fed Manufacturing Index will follow at 1530 GMT.

In the corporate space, Etsy, Hertz Global Technologies and Shake Shack will report earnings throughout the course of the day.


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