Futures inch lower on worsening China virus concerns, mixed earnings

Andrew Cummings
January 24, 2020

Wall Street stocks turned in a mixed performance on Thursday as the spread of the Chinese coronavirus continued to dampen the mood in global capital markets.

"The market's had a big run, that's made some investors a bit skittish, cautious", said Tim Ghriskey, chief investment strategist at Inverness Counsel in NY. "That put a bit of extra pressure on the market coming in".

The S&P 500 edged 0.26% lower to 3,313.19 and the Nasdaq Composite slipped 0.14% to 9,371.02.

Japan's Topix index dipped 0.1%.

At 10.12am local time, the Dow Jones Industrial Average rose 0.29 per cent to 29,280.61.

The Nasdaq composite gained 12.96 points, or 0.1%, to 9,383.77.

Canada's main stock index resumed its climb to record highs midweek as the Bank of Canada said it was finally open to lowering interest rates. Shares advanced in early Asian trading after a slide in USA stocks Tuesday as a virus outbreak in China rattled global markets.

Canadian authorities are now more prepared for SARS-like viruses, he said.

Markets would likely react to headlines like they did during the trade war between the US and China.

China's National Health Commission on Wednesday confirmed more than 500 cases of the deadly coronavirus, which causes pneumonia, and 17 fatalities. Fewer than 20 deaths have been tallied from the Chinese virus, and the World Health Organization opted against calling the outbreak a public health emergency of worldwide concern. Such a declaration can bring more money and other resources to fight a threat but can also trigger economically damaging restrictions on trade and travel in the affected countries, making the decision a politically fraught one.

Fears of the fast-spreading coronavirus hitting the global economy have knocked world stock markets off record highs this week, while early earnings reports have brought few surprises to investors.

Corporate earnings accounted for some of the biggest swings in individual stocks.

The fourth-quarter earnings season is in full swing: 58 companies in the S&P 500 have reported that, according to Refinitiv, 67.2% of companies have exceeded analysts' expectations. Southwest Airlines gained 3.6% and Alaska Air Group rose 2.4%.

Real estate and utilities companies also notched gains as traders shifted money into the safe-play sectors. Healthcare .SPXHC was the biggest percentage loser, while industrials .SPLRCI enjoyed the largest gain. Edwards LifeSciences, which makes heart valves, dropped 4.8 percent.

Elsewhere, emerging-market stocks fell to a two-week low.

Crude oil prices slumped and weighed on energy stocks. Pioneer Natural Resources dropped 2.9 percent.

Benchmark crude oil fell $1.15 to $55.59 a barrel.

The February gold contract was down US$1.20 at US$1,556.70 an ounce and the March copper contract was down 2.85 cents at US$2.765 a pound.

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