Stock-index futures slumped Monday as the number of daily U.S. COVID-19 infections hit a record at the end of last week and a final agreement on a new round of aid to the economy remained elusive.
Futures on the Dow Jones Industrial Average
fell 266 points, or 0.9%, to 27,923, while S&P 500 futures
were down 30.80 points, or 0.9%, at 3,421. Nasdaq-100 futures
dropped 82.50 points, or 0.7%, to trade at 11,581.
fell 1% last week, ending Friday at 28,335.57, while the S&P 500
saw a 0.5% weekly fall to end at 3,465.39. The Nasdaq dropped 1.1% for the week, closing Friday at 11,548.28. The weekly declines were the first in three weeks for the S&P 500 and Dow and the first in four weeks for the Nasdaq.
What’s driving the market?
COVID-19 infections continued to surge in the U.S. while Europe saw Spain and Italy impose tighter restrictions on activity in an effort to contain a surge in new cases.
The U.S. saw 83,757 new cases of COVID-19 on Friday, topping the previous high of 77,632 seen on July 16, The Wall Street Journal reported, citing data compiled by Johns Hopkins University.
Several top aides to Vice President Mike Pence, including his chief of staff tested positive for COVID-19 over the weekend. Pence, who has tested negative, will remain on the campaign trail while taking precautions, White House chief of staff Mark Meadows said on Sunday.
House Speaker Nancy Pelosi, D-California, on Sunday told CNN she’s waiting for a “final yes” on a stimulus package from the White House. Talks continued through last week between House Democrats and the Trump administration, but a final agreement remained elusive. Pelosi and Meadows on Sunday each accused the other side of “moving the goal posts” in the negotiations.
Investors are bracing for a deluge of quarterly earnings in the week ahead, including reports from more than a third of the S&P 500, including tech-related highfliers Facebook Inc.
and Google parent Alphabet Inc.
That’s a large chunk of the cohort of tech-related stocks that have been the primary drivers of the stock market rebound from its pandemic low “and their profit picture as well as forward guidance will be crucial to any further rally in the indices,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note.
“If the high-tech darlings fail to meet the expectations of investors the market could set up for a vicious downward slide as investors will face risk from COVID lockdowns, lack of fiscal stimulus, and peak growth in WFH (working-from-home) stocks,” he said.
On the economic calendar, the Chicago Fed’s national activity index for September is due at 8:30 a.m. Eastern. A September reading of existing home sales is set for release at 10 a.m. Eastern, with economists looking for sales to rise to an annual pace of 1.033 million from 1.011 million in August.
Which companies are in focus?
- Shares of toy maker Hasbro Inc. HAS were up more than 1% premarket after reporting third quarter profit and sales that topped expectations and said it looked for fourth-quarter deliveries to improve.
Dunkin’ Brands Group Inc.
shares jumped 20% in premarket activity after the New York Times reported the parent company of the former Dunkin’ Donuts and Baskin-Robbins ice cream was in talks to go private in a sale to private equity-backed Inspire Brands.
Shares of Otis Worldwide Corp.
will likely be in focus after the elevator and escalator installation company reported third-quarter profit and revenue that surpassed expectations and offered an upbeat full-year outlook.
What are other markets doing?
The yield on the 10-year Treasury note
fell 2.4 basis points to 0.816%.
The Shanghai Composite
fell 0.8%, while Japan’s Nikkei 225 index
declined 0.1%. The pan-European Stoxx 600 Europe index
fell 0.6%, while London’s FTSE 100
Oil futures were under pressure, with the U.S. crude benchmark
down 2.1% at $39.02 a barrel on the New York Mercantile Exchange Gold was fractionally higher, with the December contract
trading near $1,906 an ounce.
The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was up 0.2%.