BY MEDHA SINGH
Wall Street’s main indexes were set to open lower on Friday on fears that a record increase in coronavirus cases could further delay the easing of restrictions, while taking a toll on Corporate America.
Investors shed risky assets for the safety of gold and U.S. Treasuries as the United States registered the largest single-day increase in new infections globally for the second day in a row on Thursday.
About 41 of the 50 U.S. states have reported an increase in COVID-19 cases over the last two weeks that has forced Americans to take new precautions, with several states backpedaling on reopening plans.
“Investors are paying more attention to new case discovery than they are to the economic data and that is a pattern we’ve seen develop over the last two weeks,” said Art Hogan, chief market strategist at National Securities in New York.
A slate of economic data, including a record monthly payrolls addition, has pointed to a revival in business activity in June, fueling the U.S. stock market’s stimulus-driven rally.
The S&P 500 has risen more than 40% from its March lows and stands about 7% below its record high hit in February. The Nasdaq logged its third closing high this week, riding on a recent rally in technology stocks.
Big banks are set to report their financial results next week, marking the onset of the second-quarter earnings season. Overall profits for S&P 500 firms are expected to plunge the most since the financial crisis, according to IBES data from Refinitiv.
“While it will be a pretty ugly set of numbers, investors tend to look forward not backwards, and I don’t think we’re going to see a lot of companies move the needle in terms of expectations,” Hogan said.
At 8:15 a.m. ET, Dow e-minis <1YMcv1> were down 191 points, or 0.75%. S&P 500 e-minis <EScv1> were down 20.25 points, or 0.64% and Nasdaq 100 e-minis <NQcv1> were down 48.5 points, or 0.45%.
Energy stocks Occidental Petroleum <OXY.N> and Exxon Mobil Corp <XOM.N> dropped 2.3% and 1.8%, respectively, in premarket trading as oil prices retreated on concerns about the pace of the economic recovery and fuel demand.
Netflix Inc <NFLX.O> rose 1.1% after Goldman Sachs hiked its price target on the video streaming service’s shares.