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U.S. Stocks May Give Back Ground Amid Concerns About Coronavirus Outbreak

wallstreet sept17 21jan20 lt

With traders returning to their desks following the long, holiday weekend, stocks may move to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 68 points.

Stocks may give back ground following last week's rally to new record highs amid news of a deadly coronavirus outbreak in China.

Chinese officials revealed the coronavirus outbreak has resulted in six deaths among nearly 300 confirmed cases, with the virus confirmed to be transmissible among humans.

Concerns about the economic impact of the outbreak are likely to weigh on the markets, with travel, tourism and hospitality stocks potentially facing the brunt of the selling pressure.

Adding to the negative sentiment, the International Monetary Fund downwardly revised its forecast for global economic outlook due to bigger than expected slowdowns in emerging markets like India.

The IMF said it now expects 3.3 percent global growth in 2020 compared to its previous estimate for 3.4 percent growth. The organization also lowered its 2021 growth forecast to 3.4 percent from 3.6 percent.

Overall trading activity may remain somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

The economic calendar remains relatively quiet throughout the week, which may lead to increased attention on the latest earnings news.

A number of big-name companies are due to report their quarterly results this week, including IBM Corp. (IBM), Netflix (NFLX), Johnson & Johnson (JNJ), Procter & Gamble (PG), Intel (INTC), and American Express (AXP).

Stocks fluctuated over the course of the trading day on Friday but largely maintained a positive bias throughout the session. With the upward move on the day, the major averages once again reached new record closing highs.

The major averages moved to the upside going into the close, ending the day moderately higher. The Dow edged up 50.46 points or 0.2 percent to 29,348.10, the Nasdaq rose 31.81 points or 0.3 percent to 9,388.94 and the S&P 500 climbed 12.81 points or 0.4 percent to 3,329.62.

For the week, the tech-heavy Nasdaq surged up by 2.3 percent, while the S&P 500 and the Dow jumped by 2 percent and 1.8 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index slumped by 0.9 percent, while Hong Kong's Hang Seng plummeted by 2.8 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has dipped by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 0.8 percent and 0.9 percent, respectively.

In commodities trading, crude oil futures are sliding $0.73 to $57.85 a barrel after inching up $0.05 to $58.58 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,555, down $5.30 from the previous session's close of $1,560.30. On Friday, gold climbed $9.80.

On the currency front, the U.S. dollar is trading at 110.08 yen compared to the 110.18 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1113 compared to last Friday's $1.1095.

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