U.S. stock futures were headed lower Friday morning after posting fresh record highs this week, as lockdown measures in Europe and America to combat the COVID-19 pandemic take their toll and President Biden’s proposed new round of fiscal stimulus runs into opposition in the Senate.
How are stock benchmarks performing?
-
Futures for the Dow Jones Industrial Average
YMH21,
-0.70% YM00,
-0.70%
were off 238 points to reach 30,845, a decline of 0.8%. -
S&P 500 index futures
ES00,
-0.61% ESH21,
-0.61%
traded 26.75 points lower, or 0.7%, to reach 3,819.25. -
Nasdaq-100 futures
NQ00,
-0.50% NQH21,
-0.50%
slumped 82.25 points to 13,313.25, a slide of 0.6%.
On Thursday, the Dow
DJIA,
fell 12.37 points, or less than 0.1%, to 31,176.01, the S&P 500
SPX,
gained 1.22 points, or less than 0.1%, at 3,853.07, narrowly hitting punching out a record closing high, as did the Nasdaq Composite Index
COMP,
which climbed 73.67 points, or 0.6%, to reach 13,530.91.
What’s driving the market?
Investors are finding few reasons to continue to buy stocks on Friday after a run-up to records this week, with the acceleration of new cases and lockdowns in some European countries and in Asia undermining support for equities.
The global tally for confirmed cases of the coronavirus that causes COVID-19 climbed above 97.5 million on Friday, according to data aggregated by Johns Hopkins University, while the death toll rose above 2.09 million.
U.K. Prime Minister Boris Johnson said that the country’s current lockdowns could last into the summer, raising further questions about the economic impact of the outbreak in Europe and the U.S.
On top of that the disease, which was first reported in Wuhan, China in December of 2019, has cropped back up in the country, with 103 new infections, marking an 11th day with more than 100 confirmed cases, while Hong Kong has seen its first lockdown, with concerns amplified since new cases are coming just ahead of Lunar New Year festivities, a popular holiday in Asia.
Adding to investor worries, data showed the flash eurozone purchasing managers index dropping in January to a two-month low of 47.5, coming close to the expected 47.6—from 49.1 in December. The European Central Bank on Thursday warned that the eurozone could be headed for a double-dip recession if lockdowns become longer lasting.
In the U.S., Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, returned to the daily White House briefing on Thursday and said that new data shows that vaccines currently on the market may be less effective in battling variants of the coronavirus that causes COVID-19.
Investors have been focused on the new Biden administration’s approach to the dual economic and public-health crisis as well as the impact of the coronavirus on American corporations.
Analysts also doubt that a $1.9 billion relief package proposed by the Biden will remain intact in the Senate as the new president seeks to gather consensus in Congress on further fiscal spending.
On the corporate front, investors were watching corporate quarterly results, with a focus on Intel Corp. whose shares rallied to close higher in the last minutes of trading Thursday when the chip maker unexpectedly released quarterly results before the end of the trading session, but the stock
INTC,
retreated in extended trading as the company addressed long-range plans.
Meanwhile, International Business Machines Corp. IBM on Thursday afternoon reported a decline in adjusted net income for at least the seventh consecutive year, and a step down in sales for the eighth year out of the past nine, according to FactSet records.
Looking ahead, investors are watching for a composite survey of U.S. purchasing managers due to be published by IHS Markit at 9:45 a.m. Eastern and a report on existing-home sales for December at 10 a.m.
Which stocks are in focus?
-
Walt Disney Co.
DIS,
-1.36%
was upgraded to buy from neutral at UBS, with the broker lifting its price target on the entertainment giant to $200 from $155. -
Shares of Schlumberger Ltd.
SLB,
-4.58%
were in focus after the oil services company topped profit forecasts, and beat revenue expectations for the first time in four quarters -
Aurora Cannabis Inc.’s
ACB,
-3.21%
$125 million bought-deal financing isn’t surprising, but may not be enough for the Canadian company to establish a needed foothold in the U.S., Jefferies analyst Owen Bennett said Friday. -
Shares of Climate Change Crisis Real Impact I Acquisition Corp.
CLII,
-1.77%
soared after special-purpose acquisition company announced a deal in which EVgo Services LLC will go public. EVgo, which boasts being the “nation’s largest electric vehicle public fast charging network,” said its expects $575 million in proceeds from the merger deal, values the combined company at $2.6 billion.
How are other assets faring?
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.092%
slipped 1.8 basis points to around 1.09%. Yields and bond prices move in opposite directions. -
The ICE U.S. Dollar Index
DXY,
+0.16% ,
a measure of the currency against a basket of six major rivals, was up 0.1% on the day but headed for a weekly decline of 0.5%. -
Oil futures traded sharply lower as the spread of COVID-19 in Europe and Asia came into focus, with the U.S. benchmark
CL.1,
-2.60%
2.7% lower at $51.69 a barrel. Gold futures
GC00,
-1.35%
retreated, with the February contract
GCG21,
-1.35%
falling 1.2% to $1,843 an ounce. -
In Europe, the Stoxx 600 Europe index
SXXP,
-0.79%
traded 0.9% lower, while London’s FTSE 100
UKX,
-0.57%
was off 0.6%. -
In Asian trade, the Shanghai Composite
SHCOMP,
-0.40%
fell 0.4%, China’s CSI 300
000300,
+0.09%
closed up less than 0.1%, while Hong Kong’s Hang Seng Index
HSI,
-1.60%
fell 1.6% and Japan’s Nikkei 225
NIK,
-0.44%
closed 0.4% lower.
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