Wall Street set to fall as trade tensions add to virus woes

(Reuters) – U.S. stock indexes eyed a weaker open on Thursday as growing Sino-U.S. tensions and weak retail earnings added to worries about the pace of a recovery from a coronavirus-fueled economic slump.

The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, U.S., April 26, 2020. REUTERS/Jeenah Moon

Tensions between the world’s two biggest economies over the origin of the novel coronavirus, which had slowed a Wall Street rally this month, rose to the forefront after U.S. Secretary of State Mike Pompeo on Wednesday further criticized Beijing’s handling of the outbreak.

“Investors are concerned that the reopening optimism is starting to fade and focus shifts back to the world’s two largest economies,” said Edward Moya, senior market analyst at OANDA.

“Everyone is focused on where the narrative is going to go between China and the United States with both pointing fingers as far as who is responsible for the handling of the coronavirus and also to living up to the phase one trade deal.”

Weak earnings from popular retailers also undercut optimism over economic recovery, with Macy’s Inc (M.N) edging lower in premarket trade after forecasting a quarterly operating loss of up to $1.11 billion due to store closures amid virus-related lockdowns.

Best Buy Co Inc (BBY.N) dropped 3.4% as the electronics retailer reported a 5.3% fall in quarterly same-store sales due to the virus, while L Brands Inc (LB.N) posted worse-than-expected quarterly results.

Data from the Labor Department showed that more than 2.4 million Americans applied for unemployment benefits over the past week, down from the previous reading of 2.7 million.

Claims have gradually declined since hitting a record 6.9 million in the week ended March 28, and Thursday’s report could offer early clues on how quickly businesses re-hire as they reopen.

At 7:52 a.m. ET, Dow e-minis 1YMcv1 were down 114 points, or 0.46%. S&P 500 e-minis EScv1 were down 13.75 points, or 0.46% and Nasdaq 100 e-minis NQcv1 were down 31.5 points, or 0.33%.

The benchmark S&P 500 .SPX closed at a 2-1/2 month high on Wednesday, more than 35% above lows hit in March. Markets are watching for the index to breach 3,000 points, which analysts believe could help restore some confidence and invite more money into equities.

Take-Two Interactive Software Inc (TTWO.O) dropped 4.0% after the videogame publisher’s forecast for full-year revenue fell short of expectations.

Reporting by Ambar Warrick and Medha Singh in Bengaluru; Additional reporting by Pawel Goraj in Gdansk; Editing by Anil D’Silva

Leave a Reply

Your email address will not be published. Required fields are marked *