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Stock Futures Slip on Covid-19 Concerns

11/12/2020 | 11:23am EST

By Anna Hirtenstein

U.S. stock futures slipped Thursday as new restrictions to curb the spread of coronavirus sparked concerns about further damage to the economy.

Futures tied to the S&P 500 edged down 0.1%, pointing to a tepid decline in the gauge after the opening bell. That would extend a choppy week of trading for U.S. stocks, which sent the broad-market index up 0.8% Wednesday to its second-highest close in history.

Nasdaq-100 futures edged up 0.5%, suggesting that tech stocks may continue their rebound. Giant tech stocks such as Apple, Microsoft and Amazon.com ticked higher in premarket trading.

Optimism about a Covid-19 vaccine powered markets higher at the start of the week, but has been since waning as investors and health experts raise questions about when it may become available for widespread use. A vaccine could give the economy a shot in the arm in 2021, but it will likely take longer to heal the blow to jobs, investment and businesses.

"People are waking up to the reality of how long it will take to roll out a vaccine. I'm not a medical expert, but it seems unlikely that we're going to very quickly revert to the pre-Covid world," said Sebastian Mackay, a multiasset fund manager at Invesco. The shape of the economic recovery is "starting to look like a double-dip, to a large extent."

Markets are growing increasingly jittery about economic activity being hobbled in the coming months by fresh restrictions. New York Gov. Andrew Cuomo on Wednesday said most bars, restaurants and gyms would have to close at 10 p.m., and cautioned that rising infection levels may prompt more severe restrictions. New coronavirus cases in the U.S. climbed to another record and hospitals are facing rising numbers of Covid-19 patients.

In bond markets, the yield on the benchmark 10-year Treasury note fell to 0.944%, from 0.970% on Tuesday. Prices rise as yields fall. The U.S. bond market was closed Wednesday for Veterans Day.

Pharma company Moderna rose over 5% in premarket trading after it reported that it has sufficient data from its late-stage trial for analysis of its Covid-19 vaccine.

Fresh data on unemployment-benefit claims in the U.S., to be released at 8:30 a.m. ET, will provide some insight into the recovery of the labor market. New applications for unemployment benefits likely remained nearly steady at high levels last week amid the surge in coronavirus cases.

Initial unemployment claims are still at surprising levels and "have remained very elevated by past standards," said Keith Wade, chief economist at Schroders. The U.S. faces a W-shaped economic recovery, with a double dip potentially coming as a result of the second wave of infections, he said.

Inflation data for October, due at 8:30 a.m., are expected to show only modest aggregate price growth. Consumer prices have fluctuated in recent months from shifts in demand and supply.

"Although the economy is bouncing back, there's still spare capacity," said Mr. Wade.

On the business front, Walt Disney and Cisco Systems are expected to report earnings after the close of markets. Their results will be closely scrutinized for insight into the strength of companies that benefit as people stay at home during the pandemic.

Overseas, the pan-continental Stoxx Europe 600 slipped 0.5%.

Among European equities, Siemens dropped 2.7% after the German industrial giant cut its dividend and said its quarterly revenue declined.

Most major Asian equity benchmarks retreated modestly by the end of the day. The Shanghai Composite Index edged down 0.1% and Hong Kong's Hang Seng declined 0.3%.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

(END) Dow Jones Newswires

11-12-20 0715ET

Stocks mentioned in the article
ChangeLast1st jan.
APPLE INC. -1.37% 127.14 Delayed Quote.-1.36%
CISCO SYSTEMS, INC. 0.62% 45.43 Delayed Quote.1.36%
DJ INDUSTRIAL -0.57% 30814.26 Delayed Quote.1.48%
HANG SENG 0.39% 28620.49 Real-time Quote.4.69%
INVESCO LTD. -1.33% 20 Delayed Quote.16.29%
MICROSOFT CORPORATION -0.17% 212.65 Delayed Quote.-2.73%
MODERNA, INC. -0.05% 129.65 Delayed Quote.24.17%
NASDAQ 100 -0.73% 12803.932503 Delayed Quote.0.08%
NASDAQ COMP. -0.87% 12998.502287 Delayed Quote.1.87%
S&P 500 -0.72% 3768.25 Delayed Quote.1.05%
S&P/CITIC 300 INDEX 0.00% 4815.57 Delayed Quote.4.96%
S&P/CITIC 50 INDEX 0.00% 4871.64 Delayed Quote.4.15%
SCHRODERS PLC -1.09% 3446 Delayed Quote.4.38%
SIEMENS AG -2.09% 119.78 Delayed Quote.4.10%
STOXX EUROPE 600 -1.01% 407.85 Delayed Quote.3.25%
THE WALT DISNEY COMPANY -1.15% 171.44 Delayed Quote.-4.28%
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