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Stock-index futures struggled for direction Monday as investors monitored developments around the spread of the coronavirus and as earnings season moves into its final stage.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YMH20, -0.21% fell 60 points, or 0.2%, to 28,984, while S&P 500 futures ESH20, -0.12% were off 3.75 points, or 0.1%, at 3,321.75. Nasdaq-100 futures NQH20, -0.09% gave up 8 points, or 0.1%, to trade at 9,401.50.
Stocks lost ground Friday, pulling back from record levels, but saw the Dow and S&P 500 each log their strongest weekly gains since June, while the Nasdaq Composite saw its strongest weekly advance since November 2018. The DJIA, -0.94% rose 3% last week, ending Friday at 29,102.51, while the S&P 500 SPX, -0.54% saw a 3.2% weekly advance, ending at 3,327.71. The Nasdaq Composite COMP, -0.54% rose 4% for the week, ending Friday at 9,520.51.
What’s driving the market?
Stocks bounced back sharply last week from an end-of-January rout as worries about the spread of the coronavirus outbreak that emerged in China appeared to ease. Investors continue to keep an eye on developments surrounding the spread of the illness in the country and beyond.
Chinese factories will officially start to reopen on Monday, but local government efforts to limit the spread of the virus has led some businesses to stay closed. A prolonged closure could exacerbate the nation’s slowdown and upend global supply chains that rely on Chinese manufacturers to keep retailers stocked.
See: Investors brace for coronavirus shock as China factories poised to reopen Monday
China’s health ministry on Monday said another 3,062 cases had been reported over the previous 24 hours, raising the mainland’s total to 40,171. The death toll grew by 97 to 908, surpassing the 774 attributed to SARS, a 2003 viral outbreak that originated in China.
Meanwhile, the director-general of the World Health Organization warned Sunday that countries outside of China should be prepared for the spread of the coronavirus to accelerate.
“In the big picture, investors are still weighing the breadth and length of potential supply chain disruptions against the encouraging signs that the virus is being contained,” said Marios Hadjikyriacos, investment analyst at XM, in a note. “For now, the optimistic narrative seems to be winning out, possibly on hopes that the hit on global economic activity will ultimately be short-lived.”
Read: Why ‘buy the dip’ is the stock market’s default setting — and what it would take for that to change
Earnings season, meanwhile, moves into it final stretch this week. With nearly two-thirds of S&P 500 companies having reported through Friday, FactSet now expects profits to grow in the fourth quarter.
Earnings Watch: The earnings recession is expected to end after some big profit surprises
Which companies are in focus?
- Shares of Restaurant Brands International Inc. QSR, +1.12%, the parent of Burger King and Popeyes, rose 3.7% in premarket trade, after reporting fourth-quarter earnings that topped expectations — boosted by “transformational” growth at Popeyes attributed to the popularity of the chain’s chicken sandwich.
- Shares of Allergan PLC AGN, +2.16% were up 0.3% in premarket action after reporting fourth-quarter adjusted profit and revenue that topped expectations.
- HP Inc. HPQ, -0.50% shares jumped 4.5% in premarket action after XeroxHoldings Corp. XRX, -1.35% raised its offer price for the computer maker to $24 a share. Xerox shares were also up 6% in the premarket.
- Shares of Simon Property Group Inc. SPG, +0.11% ticked up 0.7% after it said it had entered an agreement to acquire mall REIT Taubman Centers Inc. TCO, -1.62% in a deal valued at around $3.6 billion. Simon will pay $52.59 per Taubman share, for a 51% premium over the stock’s closing price on Friday. Taubman Centers Inc. stock surged around 53%.
How are other markets trading?
The 10-year U.S. Treasury note TMUBMUSD10Y, -1.63% yield traded lower by about 1.3 basis points to 1.564%. Bond prices move inversely to yields.
Oil prices declined. The price of a barrel of West Texas Intermediate crude for March delivery CLH20, -0.52% fell 12 cents, or 0.3% to $50.19 on the New York Mercantile Exchange. In precious metals, gold for April delivery GCJ20, +0.13% rose $3.60 to $1,577.00 an ounce on Comex.
The U.S. dollar DXY, +0.04% fell 0.1% relative to a basket of its six major trading peers.
In Europe, stocks edged lower Monday, with the Stoxx Europe 600 SXXP, -0.17% down 0.1%. In Asia overnight, stocks traded mixed. The China CSI 300 000300, +0.41% was up 0.4%, while Japan’s Nikkei 225 lost 0.6%.
