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Dow futures rise about 900 points as coronavirus slowdown hope buoys stocks – MarketWatch

U.S stock-index futures rose Tuesday, extending a powerful rally to a second session on growing signs that the spread of the COVID-19 pandemic may be leveling off in parts of the world.

Markets were also encouraged by reports of further planned U.S. measures to help dampen the recessionary impact of shutdowns and business closures intended to limit the epidemic.

How are indexes performing?

Futures for the Dow Jones Industrial Average
US:YMM20
rose 784 points, or 3.5%, to reach 23,273, those for the S&P 500 index
US:ESM20
gained 80.40 points, or 3%, at 2,724.50, while Nasdaq-100 futures
US:NQM20
advanced 227 points, or 2.8%, to reach 8,256.75.

On Tuesday, the Dow
US:DJIA
rose 1,627.46 points, or 7.7%, its third biggest daily gain ever, to finish at 22,679.99. The S&P 500
US:SPX
climbed 175.03 points, or 7%, to end at 2,663.68 or its highest level since March 13. The Nasdaq Composite
US:COMP
surged 540.15 points, or 7.3%, to close at 7,913.24.

With Monday’s rally, the S&P 500 has bounced about 20% from its 52-week low on March 23.

What’s driving the market?

Eagerness to buy beaten-down stocks looked set to take hold for a second straight session on Wall Street, as investors continue to focus on signs of a slowdown in new daily deaths and infections from COVID-19, the deadly disease that was first identified in Wuhan, China in December.

Deaths in Spain fell for a fourth day and Italy reported the lowest number of new coronavirus infections in nearly three weeks, after China reported no new deaths.

President Donald Trump said in a news conference on Monday there is “tremendous light at the end of the tunnel’ with 10 different therapeutic agents in active trials. The president said research to develop vaccines and treatments has accelerated rapidly, and that notion, combined with a historic package of monetary and fiscal policy support may underpin a rally for stocks in the near term.

Indeed, reports suggested the U.S. lawmakers are hashing over a so-called Phase 4 relief package for next month that could be worth more than $1 trillion, to help prop up the economy and assist workers and small companies, according to The Washington Post,

“US markets also got an additional slug of rocket fuel on reports that the US administration was getting ready with another $1.5trn stimulus plan, to be launched in May,” wrote Michael Hewson, chief market analyst at CMC Markets, in a daily research note.

These factors have offered some guarded optimism to bullish investors still wrestling with the aftermath from the pandemic that has pushed domestic and international economies into recession.

“A recession still remains a given; but hopes are rising that it could well be manageable and not turn into a depression, and that is boosting airlines and travel shares this morning, a sector that has so far borne the brunt of the huge sell off since February 21,” Hewson wrote.

However, globally, the number of confirmed cases of COVID-19 rose to more than 1.35 million, spreading across more than 100 countries, while deaths topped 74,800, according to data aggregated by Johns Hopkins University. There are more than 368,000 confirmed cases in the U.S. and almost 11,000 deaths. And Japan declared a state of emergency, as expected, in seven of its prefectures to help direct resources to slowing the spread of the illness.

In U.S. economic news, the NFIB survey, a monthly snapshot of small businesses, found that the optimism index fell in March to 96.4, an 8.1-point decline and the largest monthly decline in the survey’s history.

The survey data come just a week after the U.S. government’s rolled out a coronavirus-rescue package, known as the CARES Act, which included $350 billion in forgivable loans for small businesses.

In other U.S. economic data, investors will be watching for a report on job openings worker turnover for another gauge of the health of the labor market, due at 10 a.m. Eastern Time after last week’s jobs report showed a surge in unemployment.

Which stocks are in focus?
  • Shares of Carnival Corp.
    US:CCL
    were set for another big day Tuesday. The cruise-ship operator’s stock was up nearly 19% in premarket trade, following a 21% Monday rise, after Saudi Arabia’s sovereign wealth fund disclosed an 8.2% stake in the firm. However, shares have fallen roughly 80% year-to-date. Rivals Norwegian Cruise Lines Holdings Ltd.
    US:NCLH
    and Royal Caribbean Cruises Ltd.
    US:RCL
    were also sharply higher before the start of trade.

  • Beaten-down airline stocks were also trading higher in premarket actions, with shares of Delta Air Lines Inc.
    US:DAL
    , American Airlines Group Inc.
    US:AAL
    , and United Airlines Holdings Inc.
    US:UAL
    all up more than 9%.

  • Exxon Mobil Corp.
    US:XOM
    said Tuesday that it was reducing its 2020 capex spending by 20% and lowering its cash operating expenses by 30% to combat the effects of lower oil prices.

  • AT&T Inc.
    US:T
    announced a $5.5 billion term-loan agreement to further insulate it from an economic slowdown and that it expects to keep paying its dividend.

How are other markets trading?

In bond markets, the yield on the 10-year U.S. Treasury note
BX:TMUBMUSD10Y
rose about 7 basis points to 0.7%.

Crude oil prices were moving higher, with the price of a barrel of West Texas Intermediate crude for May delivery
US:CLK20
trading 79 cents, or 2.9%, higher to $26.85. In precious metals, the price of an ounce of gold for June delivery
US:GCM20
rose $1450, or 0.9%, to $1,708.20.

The U.S. dollar fell 0.2% relative to a basket of trading peers, according to the ICE U.S. Dollar
US:DXY

In Europe, stocks were trading higher, with the Stoxx Europe 600
XX:SXXP
gaining 2.8% early Tuesday.

In Asia overnight, stocks closed significantly higher. The China CSI 300
XX:000300
rose 2.3%, Hong Kong’s Hang Seng index
HK:HSI
added 2.1% and Japan’s Nikkei 225
JP:NIK
rose 2%.

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