The major U.S. index futures are currently pointing to a higher opening on Monday following the sell-off seen in the previous session.
Bargain hunting may contribute to initial strength on Wall Street, with traders picking up stocks at reduced levels on the heels of the steep drop seen last Friday.
The sharp decline seen last Friday dragged the Dow down to its lowest closing level in well over a month, while the Nasdaq and the S&P 500 also pulled back well off their recent record highs.
Buying interest may be somewhat subdued, however, as some traders may be reluctant to get back into the markets amid lingering concerns about the coronavirus outbreak.
The coronavirus has now killed more people in mainland China than the SARS outbreak in 2003, adding to worries about the economic impact of the rapid spread of the disease.
Stocks moved sharply lower over the course of the trading day on Friday, more than offsetting the modest gains posted in the previous session. With the steep drop on the day, the Dow fell to its lowest closing level in well over a month.
The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow plummeted 603.41 points or 2.1 percent to 28,256.03, the Nasdaq tumbled 148.00 points or 1.6 percent to 9,150.94 and the S&P 500 plunged 58.14 points or 1.8 percent to 3,225.52.
For the week, the Nasdaq slumped by 1.8 percent, while the S&P 500 and the Dow dove by 2.1 percent and 2.5 percent, respectively.
The sell-off on Wall Street came amid lingering concerns about the coronavirus outbreak, as the death toll from the disease continues to rise.
Chinese officials said 213 people have died from the coronavirus, while the number of confirmed cases has risen to more than 9,800.
The U.K. and Russia have also confirmed their first cases of coronavirus infection, raising concerns about the rapid spread of the disease and the impact on the global economy.
Adding to the worries, Delta (DAL) and American Airlines (AAL) recently announced plans to suspend all flights to China as a result of the outbreak.
Stocks turned higher on Thursday after the World Health Organization declared the coronavirus outbreak a global health emergency but said it wasn't recommending measures that unnecessarily interfere with international trade or travel.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing personal income increased by slightly more than anticipated in the month of December.
The report said personal income rose by 0.2 percent in December after climbing by a downwardly revised 0.4 percent in November.
Economists had expected income to inch up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month.
The Commerce Department also said personal sending climbed by 0.3 percent in December following a 0.4 percent increase in November, with the growth matching expectations.
Excluding price changes, personal spending inched up by 0.1 percent in December after rising by 0.3 percent in November.
Revised data released by the University of Michigan showed U.S. consumer sentiment unexpectedly improved in the month of January compared to the previously reported deterioration.
The consumer sentiment index for January was upwardly revised to 99.8 from the preliminary reading of 99.1. The index is now up from the final December reading of 99.3.
The upward revision came as a surprise to economists, who had expected the consumer sentiment index to be unrevised at 99.1.
Semiconductor stocks showed a substantial move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 3.6 percent to its lowest closing level in well over a month.
The semiconductor index has plunged by 9.4 percent since reaching a record intraday high during trading last Friday.
Significant weakness was also visible among energy stocks, as the price of crude oil saw further downside amid concerns about demand.
Reflecting the weakness in the energy sector, the NYSE Arca Oil Index and the Philadelphia Oil Service Index plummeted by 3.3 percent and 2.6 percent, respectively.
Steel, transportation, financial and chemical stocks also saw considerable weakness, while retail stocks bucked the downtrend following upbeat earnings news from Amazon (AMZN).
Commodity, Currency Markets
Crude oil futures are slipping $0.08 to $51.48 a barrel after sliding $0.58 to $51.56 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,581.40, down $6.50 from the previous session's close of $1,587.90. On Friday, gold dipped $1.30.
On the currency front, the U.S. dollar is trading at 108.56 yen compared to the 108.35 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1063 compared to last Friday's $1.1093.
Asia
Asian stocks ended mostly lower on Monday as investors continued to fret about the rapid spread of the coronavirus and its impact on the global economy. Chinese shares led regional losses as trading resumed after the extended Lunar New Year holidays.
China's Shanghai Composite index plunged 229.92 points, or 7.7 percent, to 2,746.61, reflecting concerns over the economic impact of the coronavirus outbreak, which has now killed more people than SARS in 2003. The number of people infected by the virus, first found in Wuhan, has risen above 17,000 as of Sunday night.
Economic data from China added to the gloom as factory activity expanded at its slowest pace in five months in January and industrial firms posted their first annual decline in profits in four years in 2019.
Meanwhile, Hong Kong's Hang Seng Index edged up 0.2 percent to 26,356.98 after China's central bank and other regulators announced a slew of targeted measures aimed at helping companies, banks and individuals.
In a bid to support the world's second-largest economy, China's central bank unexpectedly lowered the interest rates on reverse repurchase agreements and pledged to inject $174 billion of liquidity into markets.
Japanese stocks fell sharply as the yen strengthened amid the worsening coronavirus outbreak and a survey showed the manufacturing sector in Japan continued to contract in January, albeit at a slightly slower rate.
The Nikkei 225 Index slumped 233.24 points, or 1 percent, to 22,971.94, while the broader Topix closed 0.7 percent lower at 1,672.66. Market heavyweight Fast Retailing gave up 2.9 percent, while tech stocks such as Advantest and Tokyo Electron fell 2.7 percent and 1.8 percent, respectively.
Australian markets hit three-week lows amid a global selloff. The benchmark S&P/ASX 200 Index tumbled 93.90 points, or 1.3 percent, to finish at 6,923.30, while the broader All Ordinaries Index plunged 101.30 points, or 1.4 percent, at 7,019.90.
Energy stocks were the worst hit as oil prices extended losses on worries about lower demand in China. Woodside Petroleum, Santos, Origin Energy and Beach Energy lost 3-6 percent.
Oil Search plunged 7.2 percent after negotiations on developing a new gas field in Papua New Guinea fell apart over the weekend.
Energy services company WorleyParson slumped 8.5 percent on news its chief executive Andrew Wood is retiring and will be replaced by the company's chief operating officer Christ Ashton.
The big four banks fell 1-2 percent ahead of the RBA's interest-rate decision on Tuesday, while mining heavyweights BHP and Rio Tinto gave up 2-3 percent.
Gold miner Evolution Mining jumped 3 percent and Northern Star Resources advanced 2.5 percent.
The manufacturing sector in Australia continued to contract in January, and at a faster rate, the latest survey from the Australian Industry Group revealed today with a PMI score of 45.4, down sharply from 48.3 in December.
Separately, official data showed that the total number of building approvals in Australia issued in December were down a seasonally adjusted 0.2 percent sequentially in December.
Seoul stocks ended on a flat note, with the benchmark Kospi finishing marginally lower at 2,118.88.
Europe
European stocks have edged higher in cautious trading on Monday after Britain finally exited the European Union at 11 pm on Friday, ending years of financial and political uncertainty.
Investors are also digesting data showing that the eurozone manufacturing PMI rose to 47.9, its highest since last March and up from December's final reading of 46.3.
While the German DAX Index has risen by 0.3 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.4 percent.
Ryanair Holdings has soared after the Irish carrier swung to a profit in the third quarter on the back of a strong Christmas period.
Tobacco giant Imperial Brands has also advanced after announcing the appointment of Stefan Bomhard as Chief Executive Officer, effective at a date to be announced.
Drax Group shares have also rallied. The electrical power generation company has provisionally secured agreements to provide a total of 2,562MW of capacity (de-rated 2,333MW) from its existing gas, pumped storage and hydro assets.
German hospital operator Rhoen-Klinikum AG has also risen after the company said it expects to actively use its newly arising opportunities in 2020.
Future Plc shares have also jumped. The media company expects the outcome for the full year to be materially ahead of current market expectations, despite some uncertainty in the macro-economic environment.
On the other hand, Julius Baer Group has slumped. The Swiss private banking and wealth management group reported that its fiscal 2019 IFRS net profit attributable to shareholders fell 36.8 percent to 464.8 million Swiss francs from last year's 735.4 million francs.
Medical technology company Siemens Healthineers has also moved to the downside after its first quarter net income fell 12 percent to 304 million euros from 345 million euros last year.
U.S. Economic Reports
At 10 am ET, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of January.
The purchasing managers index is expected to rise to 48.5 in January from 47.2 in December, although a reading below 50 would still indicate a contraction in manufacturing activity.
The Commerce Department is also due to release its report on construction spending in the month of December at 10 am ET. Construction is expected to increase by 0.5 percent.
Stocks In Focus
Shares of Gilead Sciences (GILD) are moving significantly higher in pre-market trading on news the drugmaker is working with Chinese authorities on a coronavirus treatment.
Drugmaker Aimmune Therapeutics (AIMT) is also likely to see initial strength after receiving FDA approval for the first approved treatment for patients with peanut allergies.
On the other hand, shares of Northrop Grumman (NOC) may move to the downside after Goldman Sachs downgraded its rating on the defense contractor's stock to Sell from Buy.
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