Published: Wed, February 05, 2020
Money | By Ethel Goodwin

Stocks in China Slide; US Equity Futures Advance

Stocks in China Slide; US Equity Futures Advance

The Nasdaq Composite gained 124.99 points, or 1.35%, to 9,398.39 at the opening bell.

For much of the world, the main focus was on the ripple effects of the outbreak of a virus first found in central China that has killed at least 213 and sickened almost 9,700.

China's main stock index tumbled in its first day of trading after an extended Lunar New Year holiday break bottled up much of the pressure that had been released in other markets. The Dow, S&P 500 and Nasdaq all pared positive factors in noon buying and selling after Carnival confirmed certainly one of its friends examined constructive for coronavirus six days after leaving certainly one of its ships.

The S&P 500 posted 29 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 65 new highs and 74 new lows.

This comes ahead of Friday's key US nonfarm payrolls report.

Wall Street had taken comfort in a surprisingly solid reading of USA manufacturing and the Dow ended yesterday with a rise of 0.51 per cent, while the S&P 500 gained 0.73 per cent and the Nasdaq 1.34 per cent.

China has now supplanted all other macroeconomic and geopolitical worries.

Just two weeks ago, the S&P 500 had closed at an all-time high, having climbed about 13 percent since early October previous year.

"The market is still, for the most part, in the fear mode, but as traders consume more economic data fallout, the hit to the real economy should become more apparent".

The energy sector slumped 1.3 per cent as crude prices dropped.

Sterling was nursing a grudge at US$1.2990 having shed 1.6 per cent overnight when the United Kingdom government laid out a tough opening stance for future trade talks with the European Union following its departure from the bloc last week.

USA oil futures, which hit a one-year low below $50 on Monday, recovered on Tuesday, helping market sentiment.

On Tuesday, the three-month yield was at 1.55%, above the 1.54% yield of the 10-year, which itself rose from 1.51% late Friday.

"We have full confidence to win the battle against the epidemic", said Lian Weiliang, deputy director of the National Development and Reform Commission in Beijing.

Earnings were also well and truly still in focus on Monday, with Alphabet set to report after the close.

Shares of drugmaker Gilead Sciences Inc rose 3.7% in premarket trading after the company said it has provided its experimental Ebola therapy for use in a small number of patients with the coronavirus in China.

Overall, stocks have given up some ground after a strong start to the year amid uncertainty over the virus outbreak. U.S. West Texas Intermediate (WTI) crude fell 98 cents to $50.58 a barrel. Brent crude oil, the worldwide standard, picked up 27 cents to $57.60 per barrel.

The euro declined 0.4 per cent to $1.1054.

The dollar rose to 108.67 Japanese yen from 108.37 yen on Friday.

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