U.S. Index Futures Tumble as Virus Concerns Spread Beyond Asia
In this article
U.S. stock-index futures dropped as news of the coronavirus spreading in countries including Italy and Iran increased concern over its potential impact on global growth.
S&P 500 Index contracts expiring in March slid as much as 1.5% in early Asian trading Monday after finance chiefs and central bankers from the world’s largest economies said they see downside risks to growth persisting as the deadly virus continues to spread. Dow Jones Industrial Average futures declined as much as 1.4%, while those on the Nasdaq 100 Index retreated as much as 1.8%.
China’s coronavirus cases rose to at least 76,936 over the weekend, with a total of 2,442 fatalities. South Korea raised the country’s infectious-disease alert to the highest level after a 20-fold increase in cases. Italy — the virus’s epicenter in Europe, with 140 infections — canceled the Venice Carnival and other events. Turkey will temporarily close its border with Iran, which with 43 infections has the most cases in the Middle East, including eight fatalities.
“The virus spreading to Italy and Iran is finally spooking some investors on what has mostly been a mostly Asian situation,” said Rick Bensignor, the founder of Bensignor Group and a former strategist for Morgan Stanley. “It’s not a question of if it comes to the U.S., but when, and perhaps investors are finally realizing that.”
The S&P 500 fell 1.1% on Friday after a major piece of U.S. economic data showed a sizable hit from the epidemic. U.S. business activity fell in February for the first time since 2013 as the outbreak made firms hesitant to place orders.
“This escalation has had investors reverse their previous opinion that it would be a temporary economic problem,” said Michael McCarthy, chief market strategist at CMC Markets.
Source: Read Full Article