Wall Street set for subdued open as virus surge threatens recovery

The spread of the coronavirus disease (COVID-19) in New York
FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S., May 28, 2020. (REUTERS/Lucas Jackson)


Wall Street’s main indexes were set to open near-flat on Wednesday, as a record single-day spike in coronavirus cases in the country heightened fears of another lockdown and threatened to derail a nascent economic recovery.

After notching up its biggest three-month gains since 1998 in the previous session, the S&P 500 looked set to begin the third quarter on a glum note as COVID-19 cases rose by more than 47,000 on Tuesday, with California, Texas and Arizona emerging as new epicenters.

A warning from the government’s top infectious disease expert that the number could soon double also took the shine off data showing that a slump in global manufacturing was easing as economies reopened.

“We had to dig a pretty good size hole in the market in the first quarter to have the kind of rebound that we just saw,” said Art Hogan, chief market strategist at National Securities in New York.

“The biggest challenge markets will face in the new quarter is the accelerating virus infections that threaten to set back reopenings and, with them, any economic progress.”

Data on Wednesday showed U.S. private payrolls increased less than expected in June. Figures on U.S. manufacturing activity for the month are due later in the day, followed by the Labor Department’s nonfarm payrolls report on Thursday.

At 8:56 a.m. ET, Dow e-minis were up just 4 points, or 0.02%, S&P 500 e-minis were up 2.25 points, or 0.07% and Nasdaq 100 e-minis were down 5.25 points, or 0.05%.

Battered cruise line operators Norwegian Cruise Line Holdings Inc, Royal Caribbean Cruises Ltd and Carnival Corp tumbled as much as 1% in premarket trading.

Macy’s Inc fell 2.8%% after it reported a staggering $3.58 billion quarterly loss, led by a $3 billion impairment charge due to COVID-19 induced-store shutdowns.

In a bright spot, FedEx Corp jumped 11.7% after posting better-than-expected quarterly profit and revenue, helped by a surge in pandemic-fueled home deliveries.