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By Medha Singh
(Reuters) – U.S. stock index futures surged on Wednesday on reports of medical breakthroughs in the fight against the fast-spreading coronavirus and expectations of more stimulus from China to limit the economic fallout of the epidemic.
A Chinese university found an effective drug to treat people with the new virus, according to a local TV report. Separately, researchers in the UK told Sky news that they made a “significant breakthrough” in finding a vaccine.
Reuters has not verified the media reports, but several traders cited them for the sharp moves in global stock markets. U.S. stock index futures turned positive and the world equity index () moved sharply higher after the reports.
The World Health Organization, however, played down the reports, saying “there are no known effective therapeutics against this 2019-nCoV (virus)”.
The benchmark S&P 500 posted its best one-day gain in about six months on Tuesday, while the Nasdaq hit a record high after China pumped in hundreds of billions of dollars into the financial system this week to limit the impact of the epidemic.
The country’s central bank is likely to lower its key rate on Feb. 20, sources told Reuters, as the death toll from the virus epidemic climbs to nearly 500.
United Airlines (O:) and American Airlines Group (O:) both suspended all flights to and from Hong Kong, effectively leaving no U.S. carrier flying passengers to the Asian financial hub. Their shares rose 1.8% and 1.2%, respectively, in premarket trading.
At 7:28 a.m. ET, were up 221 points, or 0.77%. S&P 500 e-minis were up 24.25 points, or 0.73% and were up 85 points, or 0.91%.
With the latest U.S. earnings season at the halfway mark, corporate America has largely beaten Wall Street expectations. Analysts now expect profit for S&P 500 firms to have increased by 1.6% in the fourth quarter, according to IBES data from Refinitiv.
Coty Inc (N:) climbed 8.6% as the cosmetics maker beat estimates for quarterly profit and revenue.
But Ford Motor Co (N:) slumped 7.8% after the No. 2 U.S. automaker delivered a weaker-than-expected 2020 forecast.
Snap Inc (N:) dropped 9% after the owner of the popular photo messaging app Snapchat missed estimates for quarterly revenue.
In economic news, the Institute of Supply Management’s (ISM) January data for the U.S. services sector is due at 10 a.m. ET. Its manufacturing counterpart showed a surprise expansion in activity last month.
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