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U.S. Stocks Likely To Extend Pullback Amid Renewed Coronavirus Fears

wallstreet oct22 24feb20 lt

Stocks are likely to come under pressure in early trading on Monday, extending the pullback seen over the two previous sessions. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 810 points.

Concerns about the spread of the coronavirus are likely to weigh on Wall Street amid a spike in the number of confirmed cases outside of China.

South Korea announced a total of 231 new coronavirus cases earlier today, leading the government to raise the coronavirus alert to its highest level.

A jump in confirmed coronavirus cases in Italy as well as new cases in Middle East countries like Iraq and Afghanistan has raised concerns about the outbreak escalating into a pandemic.

Traders shrugged off concerns about the coronavirus earlier this month, helping propel stocks to new record highs amid optimism the outbreak would quickly be contained.

However, the continued spread of the virus along with several companies warning about the financial impact seems to have traders reassessing their positions.

A lack of major U.S. economic data may keep some traders on the sidelines, although reports on consumer confidence, new home sales, durable goods orders, and personal income and spending may attract attention in the coming days.

Stocks showed a substantial move to the downside during trading on Friday, adding to the losses posted on Thursday. The Nasdaq and the S&P 500 pulled back further off the record closing highs set on Wednesday.

The major averages all closed firmly in the red, although the tech-heavy Nasdaq posted a particularly steep loss. While the Nasdaq plunged 174.37 points or 1.8 percent to 9,576.59, the Dow slid 227.57 points or 0.8 percent to 28,992.41 and the S&P 500 tumbled 35.48 points or 1.1 percent to 3,337.75.

For the week, the Nasdaq slumped by 1.6 percent, while the Dow and the S&P 500 fell by 1.4 percent and 1.3 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved significantly lower during trading on Monday. Hong Kong's Hang Seng Index plunged by 1.8 percent, while South Korea's Kospi plummeted by 3.9 percent.

The major European markets have also shown substantial moves to the downside on the day. While the U.K.'s FTSE 100 Index has shown a 3.3 percent nosedive, the French CAC 40 Index and the German DAX Index are tumbling 3.8 percent and 3.9 percent, respectively.

In commodities trading, crude oil futures are plunging $2.10 to $51.28 a barrel after sliding $0.50 to $53.38 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,680.10, up $31.30 from the previous session's close of $1,648.80. On Friday, gold spiked $28.30.

On the currency front, the U.S. dollar is trading at 111.28 yen compared to the 111.61 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.0813 compared to last Friday's $1.0847.

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