Market Snapshot: Dow futures fall as Wall Street weighs states’ reopenings, China-U.S. tensions
‘We have to get it back open safely but as quickly as possible,’ says Trump at a town hall meeting hosted by Fox News
U.S. stock-index futures fell sharply in thin trading Sunday evening as investors contended with states’ reopenings amid signs of brewing conflict between China and the U.S. over Beijing’s handling of the coronavirus outbreak, which was first identified in Wuhan.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average
were headed 228 points, or 1%, lower at 23,391, those for the S&P 500 index
were off 26.70 points, or 1%, at 2,795, while Nasdaq-100 futures
retreated 87 points, or 1%, at 8,631.
The major benchmarks booked losses for the week after a sharp decline on Friday, with the Dow
and S&P 500
losing 0.2% and the Nasdaq Composite Index
ending the week 0.3% lower.
What’s driving the market?
An attempt to restart the economies of dozens of U.S. states hasn’t come without problems, amid warmer weather that has lured larger gatherings of people out onto the streets in the midst of the worst viral outbreak in more than a century.
Some 51 summonses were issued by New York police, the Wall Street Journal reported, with the majority for social-distancing violations, in the state where there have been some 70,000 hospitalizations from COVID-19, the highest number of any state.
President Donald Trump, fielding questions from a virtual town-hall meeting Sunday night aired by Fox News, suggested that the need is strong to reopen the country’s businesses, which have been shuttered due to measures in place to slow down the spread of the deadly disease.
“We have to get it back open safely but as quickly as possible,” Trump said.
Trump’s comments come as the economy has gone into contraction, with data for the first quarter showing that a 4.8% decline in the annual rate of growth, while more than 30 million people, and counting, have filed for unemployment benefits since the end of February.
Against that backdrop, markets have managed to mostly rebound on hopes of success with experimental treatments for the deadly disease, including Gilead Sciences’
remdesivir, and signs of a stabilization of new cases.
However, the main equity benchmarks snapped a streak of two straight weeks of gains on Friday, as markets digested the recent moves and as the U.S. continued to place blame on China for its handling of the pandemic.
On Sunday, U.S. Secretary of State Mike Pompeo, in an interview on ABC’s “This Week, ”said he has seen “enormous evidence” that the virus originated in a laboratory in Wuhan, China.
Trump during his Sunday night Fox appearance said: “I think they made a horrible mistake and they didn’t want to admit it.”
Meanwhile, investors may also focus on remarks made by Warren Buffett on Saturday, during Berkshire Hathaway’s
annual shareholder meeting, which was via webcast. The venerated, 89-year-old investor adopted a reassuring posture, but also noted that the virus created a lot of uncertainty in financial markets. “We’ve faced tougher problems, and the American miracle, the American magic, has always prevailed, and it will do so again,” Buffett declared.
The billionaire investor, however, acknowledged that he dumped his holdings of airlines, including Delta Air Lines Inc.
American Airlines Group Inc.
United Airlines Holdings Inc.
and Southwest Airlines Co.
Which stocks are in focus?
Shares of Delta, American Airlines, Southwest and United Airlines will be in focus on Monday, as well as airline-focused exchange-traded fund U.S. Global Jets ETF
the aeronautics and defense contractor, also may be in focus after Buffett on Saturday referred to the company as “hard to evaluate.”