U.S. stock futures on Tuesday were headed sharply higher, despite the spread of a deadly Asian virus that has claimed hundreds of lives and infected more than 20,000 people.
How are stock benchmarks faring?
Futures for the Dow Jones Industrial Average YMH20, +1.23% were up 351 points, or 1.2%, at 28,713, those for the S&P 500 index ESH20, +1.24% were gaining 40.65 points, or 1.3%, at 3,286.25, while Nasdaq-100 futures NQH20, +1.49% advanced 137.50 points, or 1.5%, to reach 9,251.50.
On Monday, the Dow closed 143.78 points higher, in its best one-day performance since Jan. 28 as manufacturing data came in surprisingly strong. The S&P 500 index SPX, +0.73% climbed 23.40 points, or 0.7%, to close at 3,248.92, while the Nasdaq Composite Index COMP, +1.34% advanced 122.47 points to 9,273.40, a gain of 1.3%.
What’s driving the market?
Politics and coronavirus were drawing outsize attention in early Tuesday trade as investors awaited a State of the Union address at 9 p.m. Eastern Time.
“It is expected to be an optimistic speech focusing on Mr. Trump’s deemed achievements and his goals ahead of the presidential election in November,” wrote analysts from UniCredit in a Tuesday research note.
Wall Street investors were also focused on the Democratic race for the 2020 presidential nomination, after technology problems and reporting inconsistencies kept Iowa Democratic Party officials from releasing results from Monday’s caucus, the first contest in a six-month process.
Sen. Bernie Sanders, the Vermont independent, released figures showing he was in front, while the former mayor of South Bend, Ind., Pete Buttigieg, claimed victory, saying that “by all indications, we are going on to New Hampshire victorious.” New Hampshire will be the location of the second primary contest for Democrats on Feb. 11.
Jim Cramer, CNBC’s “Mad Money” host, tweeted that the political situation was what was driving stock futures higher, reflecting possible optimism toward the prospect of a re-election of President Donald Trump.
Trump, meanwhile, is likely to be cleared by the Senate on Wednesday in his impeachment hearing, market participants are betting.
Meanwhile, the coronavirus has infected more than 20,000 people in China and claimed 465 lives, according to China’s National Health Commission. The People’s Bank of China offered funds in the overnight market for a second consecutive day, to ease the economic stress of containing the viral outbreak, according to The Wall Street Journal.
Markets have been fairly upbeat on the back of some of the efforts to limit the spread and the PBOC’s attempts to stanch the economic pain for China.
“Sentiment in equities remains resilient for a second day in a row, but the markets have yet to recoup all the ground that was given up last week, so traders haven’t totally shaken off the health fears,” wrote David Madden, market analyst at CMC Markets UK, in a daily research note.
Looking ahead, the data calendar is light with reports on vehicle sales expected throughout the day and a report on Factory orders due at 10 a.m. ET.
Which stocks are in focus?
- Shares of Google-parent Alphabet Inc. GOOG, +3.61% GOOGL, +3.48% fell 3.2% off-hours trade after it reported revenue below Wall Street estimates late Monday. The company is also being probed over location tracking by the Irish Data Protection Commission.
- Shares of Clorox Co. shares CLX, -0.93% were rising before the opening bell Tuesday after reporting upbeat results.
- Shares of Apple Inc. AAPL, -0.27% were up 2.2% in heavy premarket trade, after a report that the company’s suppliers planned to resume full-scale production Feb. 10, despite Coronavirus concerns.
- Sirius XM Holdings Inc. SIRI, +1.41% on Tuesday reported in-line profit for its fourth quarter while beating expectations on revenue for the period.
- Shares of McKesson Corp. MCK, +0.90% jumped 2.2% in premarket action, after the drug distributor beat fourth-quarter earnings expectations.
- NXP Semiconductors NV’s NXPI, -0.91% stock was trading lower in the premarket after reporting results Monday following the close.
- Shares of Tesla Inc TSLA, +19.89% ., were surging in the premarket trade as the electric-vehicle maker draws bullish endorsements from investors and research analysts.
How are other markets trading?
Government bond yields were surging, with the yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +3.13% up about 6 basis points to 1.58%.
Oil prices were on the rise, with the price of a barrel of West Texas Intermediate crude for March delivery CLH20, +2.22% rising 1.7% to $50.92. In precious metals, the price of an ounce of gold for April delivery GCJ20, -0.75% declined 0.7% to about $1571.
The U.S. dollar DXY, +0.11% rose 0.1% relative to a basket of six major peers.
In Europe, stocks were rallying, with the Stoxx Europe 600 SXXP, +1.31% gaining 1.2%.
In Asia overnight, stocks rose significantly. The China CSI 300 000300, +2.64% added 2.6%, Japan’s Nikkei 225 NIK, +0.49% added 0.5% and Hong Kong’s Hang Seng HSI, +1.21% advanced 1.2%.
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