U.S. stock futures sink on growing concern of outbreak’s economic impact

U.S. stock market futures sank late Sunday as the spread of coronavirus raised worries that global economic growth could take a hit.

Dow Jones Industrial Average futures YM00, -1.21%  fell more than 300 point soon after electronic trading opened late Sunday. S&P 500 futures ES00, -1.24%  and Nasdaq Composite futures NQ00, -1.67%  also fell more than 1% each.

On Saturday, the International Monetary Fund warned the virus outbreak could reduce global economic growth by 0.1% this year, and drag China’s annual growth 0.4 percentage points lower than January estimates.

“The world economy is facing a clear slowdown and this slowdown might be reinforced by the so-called coronavirus,” French Finance Minister Bruno Le Maire said at a G-20 finance meeting in Saudi Arabia, according to the Associated Press.

The global spread of the virus in patients with no links to China suggests “things are about to get extremely problematic, and market conditions could get exponentially worse this week,” Stephen Innes, chief market strategist with AxiTrader, wrote in a note Sunday.

Read: Technology stocks could be on the verge of a bear market, warns investor who once ran the world’s biggest tech fund

South Korea’s Kospi 180721, -2.76%  sank more than 2% in Monday trading as the country went on high alert to contain the spread of the COVID-19 coronavirus. More than 600 people in South Korea have been infected, with most of the diagnoses coming in the past few days. Under the new alert level, the government has the authority to order schools to be closed, stop public transportation and to cut off flights to and from South Korea.

Australia’s S&P/ASX 200 XJO, -2.11%  also dropped more than 2% in early trading. Japan’s Nikkei is closed Monday for a holiday.

Crude oil prices fell as well, with West Texas Intermediate crude for April delivery CLJ20, -2.83%  and April Brent crude BRNJ20, -3.16% , the global benchmark, each down more than 2%.

Gold prices GCJ20, +1.10%  rose 1%, to $1,666.50.

Authorities in northern Italy canceled some public events, including Venice’s Carnival, in an effort to reduce the spread of the virus. Italian officials said Sunday they have 152 confirmed cases, the most in any country outside Asia.

China’s President Xi Jinping on Sunday noted the outbreak news was “grim,” but said measures must be taken to get China’s economy going again, including reopening factories in low-risk areas. Experts forecast as much as a 1% reduction in China’s economic output this quarter due to strict quarantines that shuttered businesses and factories.

Chinese officials again reported fewer than 1,000 new cases Sunday, though the overall total in mainland China is nearly 77,000 infected with more than 2,400 deaths.

Read: Businesses get bigger butterflies over coronavirus and that’s not good for the economy

U.S. stocks slumped Friday, ending a two-week win streak, with tech stocks being hit hardest.

The Dow Jones Industrial Average DJIA, -0.78%  closed below 29,000, shedding 227.51 points, or 0.8%, at 28,992.40, its worst one-day percentage drop since Feb. 7. The S&P 500 SPX, -1.05%  lost 35.48 points, or 1.1%, to settle at 3,337.75, its biggest one-day percentage decline since Jan. 31. The Nasdaq Composite Index COMP, -1.79%  lost 174.37 points, or 1.8%, to finish at 9,576.59, its worst single-day percentage fall since Jan. 27, according to Dow Jones Market Data.

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