Wall Street set for subdued open as virus cases rise

Traders exit the 11 Wall St. door of the NYSE in New York
FILE PHOTO: Traders exit the 11 Wall St. door of the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 11, 2020. (REUTERS/Brendan McDermid)


U.S. stock index futures pointed to a muted open for the S&P 500 and Dow on Monday as fears of a resurgence in coronavirus infections fueled worries of another setback to business activity.

Demand for perceived safe-havens including gold and U.S. Treasuries rose as the World Health Organization reported a record rise in global coronavirus cases on Sunday.

Shares of airlines, one of the worst-hit sectors by the lockdowns, tumbled with United Airlines, JetBlue Airways and Alaska Air Group down between 2.1% and 4% in premarket trading.

American Airlines Group Inc tumbled 9% as it planned to secure $3.5 billion in new financing by selling shares and convertible senior notes to boost liquidity.

“Investors are trying to calibrate the difference between an increase in new coronavirus cases against sequentially improving economic data…,” said Art Hogan, strategist at National Securities.

“The concern right now is the possibility of partial reclosing of the economy as and when fresh cases flare up.”

In the past week, several U.S. states, mainly in the West and South, have reported a surge in cases.

On Friday, the S&P 500 and the Dow ended a choppy session in the red after Apple Inc’s move to temporarily shut some U.S. stores brought back concerns of a delay in recovery of business activity.

The S&P 500 has climbed about 41% from its March lows, thanks to trillions of dollars in monetary and fiscal support, the reopening of businesses and improving economic data. It is now just about 9% off its Feb. 19 record high.

Meanwhile, credit rating agency Moody’s said the health crisis will push debt levels in the world’s richest nations up by almost 20 percentage points on average this year, almost double the damage seen during the 2009 financial crash.

At 8:21 a.m. ET, Dow e-minis were up 201 points, or 0.79%. S&P 500 e-minis were up 25.25 points, or 0.83% and Nasdaq 100 e-minis were up 89 points, or 0.9%.

U.S.-based meat processor Tyson Inc slipped 2.4% as China’s customs authority suspended imports of poultry products from a plant owned by the company that had been hit by the coronavirus.

Walmart Inc rose 1.2% as brokerage UBS upgraded the retail giant’s shares to “buy”.

Virgin Galactic Holdings Inc soared 14% as it signed up with NASA to develop a program to promote private missions to the International Space Station.