By Peter Nurse
Investing.com - U.S. stock markets are set to open lower, following on from losses in Asia and Europe with investor sentiment remaining weak as the deadly coronavirus continues to spread beyond China, prompting more countermeasures from governments and companies that are likely to weigh on the economy in the near term.
At 7:20 AM ET (1220 GMT), futures for the S&P 500 traded 22 points, or 0.7%, lower, futures for the Nasdaq 100 down 53 points, or 0.6%, while the Dow Jones 30 Futures contract fell 198 points, or 0.7%.
Earlier Thursday, Japan’s Nikkei closed 1.7% lower, the Hang Seng in Hong Kong dropped 2.6%, while the KOSPI index in South Korea fell 1.7%. Stock markets are still closed in China. The major European indexes all traded sharply in the red.
The death toll from the coronavirus outbreak has now risen to 170, with 7,711 confirmed cases, according to the Chinese health authorities, affecting every region in mainland China. Infections have also spread to at least 15 other countries.
"In the last few days the progress of the virus, especially in some countries, especially human-to-human transmission, worries us," World Health Organization Director-General Tedros Adhanom Ghebreyesus said late Wednesday.
The group meets Thursday to consider once more whether the virus constitutes a global health emergency.
Against this backdrop, the Federal Reserve decided to keep its interest rates unchanged late Wednesday, with Chairman Jerome Powell acknowledging the likely impact on growth on the region during his press conference.
In corporate news, Telsa will be in the spotlight after the electric car maker posted upbeat fourth-quarter numbers, beating estimates for both profit and revenue. The company has become the second most valuable auto manufacturer behind Toyota, overtaking Volkswagen (DE:VOWG_p). It also announced a new partnership with battery suppliers CATL and LG Chem earlier on Thursday, although Japan's Panasonic is expected to remain its main supplier.
Facebook (NASDAQ:FB) stock dropped sharply after hours after the social media giant reported its first drop in annual profits on the back of increased spending to beef up privacy protections.
Microsoft (NASDAQ:MSFT) also offered up fourth-quarter figures late Wednesday, posting record sales and a hefty jump in quarterly profit. Fellow tech giant Amazon (NASDAQ:AMZN) follows with its earnings due after the close Thursday.
Southwest Airlines (NYSE:LUV) fell 3.1% after The Wall Street Journal reported that it failed to respect safety regulations properly over a two-year period, raising further questions over the effectiveness of the Federal Aviation Agency's supervision.
Verizon (NYSE:VZ) will also be in focus after it posted its best quarter for subscriber growth in six years. It still expects underlying earnings growth of only 2%-4% this year, due partly to an expected $17.5 billion capital spending requirement.
The highlight of the economic data slate Thursday is the release of the fourth quarter U.S. GDP figure, at 8:30 AM ET (1330 GMT). The U.S. economy grew by an annualized 2.1% in the third quarter, and the growth rate is expected to stay unchanged. However, the trade spat with China and Boeing’s 737 MAX woes could have an impact.
AT 07:25 AM ET (1225 GMT), U.S. crude futures slumped 2.3% to $52.09 and the international benchmark Brent contract fell 2.6% to $57.40, approaching the levels these contracts last saw in October. Gold futures rose 0.7% to $1,570.85, while the dollar index, which tracks the greenback against a basket of currencies, fell 0.1% due to losses against the safe haven Swiss franc and yen, as well as against sterling after the Bank of England left its key rate unchanged.