Coronavirus headwinds are set to hammer stocks
The U.S. stock market is pacing for substantial losses this morning as the coronavirus outbreak worsens. With the death toll from the virus rising to more than 80 in China and a fifth confirmed case in the U.S., traders are taking a risk-off approach this morning, sending Dow Jones Industrial Average (DJI) futures more than 400 points below fair value. Similar losses are piling up for the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX), with travel stocks in particular posting outsized pre-market moves. This comes after the Dow posted its worst week in months.
Continue reading for more on today's market, including:
- Call traders are eyeing this software stock's earnings report.
- The Chinese travel stock that keeps moving lower.
- Plus, homebuilder shares strong results; ABBV outperforms; and BABA paces China stock sell-off.
5 Things You Need to Know Today
- The Cboe Options Exchange (CBOE) saw 1.59 million call contracts traded on Friday compared to 1.12 million put contracts. The single-session equity put/call ratio rose to 0.70, and the 21-day moving average was 0.52
- Homebuilder D. R. Horton Inc (NYSE:DHI) reported better-than-expected earnings this morning, but the stock is still set to slump with the broader market. The company said it sees strong demand for new homes in 2020, lifting its outlook as a result.
- The shares of AbbVie Inc (NYSE:ABBV) will be worth watching since China is testing the company's HIV drug for coronavirus patients. This has ABBV stock as one of the few pre-market winners on the Street, after the stock on Friday ended below the 80-day moving average for the first time since September.
- Alibaba Group Holding Ltd (NYSE:BABA) shares are leading the pullback in Chinese stocks, as the e-commerce giant is set for a 6% decline at the open. Similar losses are piling up for other China-based stocks
- Today investors will keep an eye on new home sales data. Earnings from Ashland (ASH), F5 Networks (FFIV), WesBanco (WSBC) and Whirlpool (WHR) will be released.
Global Markets Slide
Most markets in Asia remained closed for the Lunar New Year, but those that were open finished sharply lower. That includes Japan's Nikkei, which closed down 2%, with airline and travel stocks taking on steep losses as the coronavirus continues to spread rapidly. The Japanese yen – widely considered a safe-haven currency – surged against the dollar today as well.
Over in Europe, stocks are significantly lower amid the intensifying coronavirus outbreak. London's FTSE 100 is down 2.1%, with Tullow Oil a notable loser. The French CAC 40 and German DAX are both off by 2.2%, dragged lower by airliners Air France and Lufthansa.