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US Stocks Set To Drift Lower As Virus Worries Mount

stockmarkets jan18 24jun20 lt

U.S. stocks look set to tumble at open on Wednesday as reports of rising coronavirus infections in several states fueled concerns over a second wave of the virus.

Futures tied to the S&P 500 dropped 23 points, the Dow futures were down 230 points and the Nasdaq Composite futures were down 42 points.

Arizona, Texas and California reported daily records of infections Tuesday, raising fears that authorities could tighten measures in an effort to halt the spread.

Texas Gov. Greg Abbott and Florida Gov. Ron DeSantis said they would step up enforcement of social-distancing guidelines.

California Gov. Gavin Newsom warned earlier this week that restrictions may have to be tightened again if current trend lines don't improve.

Dr. Anthony Fauci, the federal government's top virus expert, told Congress on Tuesday that the next two weeks would be critical in trying to keep the virus under control.

The European Union plans to ban U.S. travelers when it reopens its borders on July 1 because of the Trump administration's poor handling of the Covid-19 pandemic, the New York Times reported. The EU is expected to submit the list to the 27 bloc members next week.

Adding to virus troubles, the United States is considering tariffs on $3.1 billion of exports from the United Kingdom, France, Spain and Germany, Bloomberg news reported.

Analysts fear that this could spiral into a wider transatlantic trade fight later this summer.

Amid a light day on the economic front, the International Monetary Fund is due to release an updated outlook later today.

German business morale posted its strongest rise in June since records began and Europe's largest economy should return to growth in the third quarter, the Ifo institute said earlier today.

Elsewhere, Asian stocks crept to a four-month high, while European markets fell sharply in early trade on concerns over a spike in coronavirus cases in Tokyo, Germany and the U.S.

Parts of South Korea and Australia have also reported a resurgence in coronavirus infections.

The dollar paused after two straight days of losses, while gold climbed to its highest level in nearly eight years on safe-haven demand.

Oil turned lower after the American Petroleum Institute estimated a large build of 1.749 million barrels for the week ended June 19 late Tuesday.

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