Wall Street set to open lower as virus cases surge, stimulus doubts weighs

The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City
FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City

By Medha Singh and Shivani Kumaresan, Reuters

Wall Street was set to start the week on a dour note on Monday as surging coronavirus cases and a stalemate in Washington over the next fiscal aid bill darkened the economic outlook in the run up to Nov. 3 presidential elections.

New infections touched record levels in the United States recently, with El Paso in Texas asking citizens to stay at home for the next two weeks. In Europe, Italy and Spain imposed new restrictions.

Travel-related stocks that are vulnerable to COVID-19 news including American Airlines <AAL.O>, United Airlines Holdings <UAL.O> and Booking Holdings Inc <BKNG.O> fell between 2% and 2.8% before the bell.

“The continued spikes in coronavirus globally with the shutdowns that we are seeing in Europe over the weekend are adding to some of the pre-market jitters,” said Ryan Detrick, senior market strategist at LPL Financial, North Carolina.

Wall Street’s main indexes finished last week lower as investors closely monitored talks over the next round of fiscal package, while economic data pointed to a stalling recovery.

U.S. House Speaker Nancy Pelosi on Sunday said the Trump administration was reviewing the latest proposal for COVID-19 relief over the weekend and that she expected a response on Monday.

“The harsh reality is its going to be very difficult to get as much as the $2 trillion deal even if they have something today or tomorrow. It’s not going to happen until after the election,” Detrick said.

Meanwhile, more than 59.1 million Americans have already voted in person or by mail as President Donald Trump and Democratic challenger Joe Biden enter their final full week of campaigning.

It is also one of the busiest week of third-quarter earnings season that will see results from mega-cap U.S. tech firms including Apple Inc <AAPL.O>, Amazon.com Inc <AMZN.O>, Google-parent Alphabet Inc <GOOGL.O> and Facebook Inc <FB.O>.

Of the 135 companies in the S&P 500 that have reported earnings so far, 83.7% of them have beaten Wall Street expectations, according to Refinitiv data.

At 08:32 a.m. ET, Dow E-minis <1YMcv1> were down 1.01% at 27,900 points and the S&P 500 E-minis <EScv1> fell 0.96% to 3,418.5 points. Nasdaq 100 E-minis <NQcv1> skid 0.88% to 11,561 points.

Software company Oracle Corp <ORCL.N> fell 2.8% after its German rival SAP <SAPG.DE> abandoned medium-term profitability targets and cautioned its business would take longer than expected to recover from the pandemic hit.

Hasbro Inc <HAS.O> fell about 3% despite beating analysts’ estimates for quarterly revenue and profit.