Stock-index futures lower in choppy trade after ECB rolls out additional stimulus and Fed backstops money markets - MarketWatch

U.S. stock-index futures traded lower Thursday in seesaw price action after economic data showed the first signs of the impact of the coronavirus pandemic with weekly jobless claims jumping.

Overnight stock futures received some support from the European Central Bank which rolled out an expanded asset-purchase program and the Federal Reserve announced a facility to backstop money-market mutual funds.

What are major indexes doing?

Futures on the Dow Jones Industrial Average YM00, -1.20% were 395 points lower, down 2%, at 19,458, while S&P 500 futures ES00, -1.27% fell 2% to 2,365. Nasdaq-100 futures NQ00, -0.45% were off 1.3% at 7,128.

On Wednesday, the Dow DJIA, -2.13% fell 1,338.46 points, or 6.3%, to end at 19,898.92, for its lowest close since Feb. 2, 2017. The S&P 500 SPX, -1.83% dropped 131.09 points, or 5.2%, to end at 2,398.10, while the Nasdaq Comoosite COMP, -0.88% lost 344.94 points to end at 6,989.84, down 4.7%.

What’s driving the market?

U.S. stock futures were lifted late Wednesday after the European Central Bank, in an emergency meeting, said it was launching a new program that would allow it to buy 750 billion euros ($820 billion) in government and private sector bonds as well as commercial paper.

Also making late-night moves, the Fed announced a new Money Market Mutual Fund Liquidity Facility, or MMLF, to assist money-market funds in meeting demands for redemptions by households and other investors.

“The market reaction to the extra stimulus efforts enhances our longstanding view that the worst is not behind us yet,” said Charalambos Pissouros, senior market analyst at JFD Group, in a note. “We repeat that with monetary and fiscal easing, consumers have to get out of their homes and start spending for the engines of the global economy to restart. With the daily infected cases and deaths hitting new records day by day, we see that as a very hard task.”

Also late Wednesday, President Donald Trump signed a coronavirus bill approved by the House and Senate that targets paid leave and testing, as lawmakers and the Trump administration already are looking ahead to huge stimulus measures and other programs aimed at cushioning the economy from the blow created by the pandemic.

Financial markets remain volatile as investors factor in global economic shocks resulting from the COVID-19 pandemic. Investors on Wednesday continued to liquidate stocks as well as other assets, including gold and government bonds, while pushing up the dollar in a dash for cash.

Read:How a ‘disorderly’ U.S. dollar is amplifying the stock-market rout and adding to volatility

U.S. economic data showed the start of the coronavirus impact. A manufacturing index from the Philadelphia Federal Reserve Bank plunged to -12.7 in March, the lowest since June 2012.

Also some 281,000 Americans filed for unemployment insurance for the first time in the March 14 week, the highest since 2017, but still subdued compared to the massive crush expected in coming weeks as businesses lay off workers in response to the pandemic.

How are other markets trading?

The yield on the benchmark 10-year Treasury note TMUBMUSD10Y, 1.119% drifted down about 3 basis points to 1.15%.

West Texas Intermediate crude, the U.S. gauge of oil prices, CLK20, +10.37% jumped more than 8% to $22.56 on the New York Mercantile Exchange.

Gold futures for April GCJ20, +0.12% was down 0.6% to $1,469.80.

The ICE U.S. dollar index, DXY, +0.43% which tracks the greenback’s performance against a basket of currency trading peers, roared 1.2% higher.

In Asia overnight, Japan’s Nikkei Index NIK, -1.03% lost a little more than 1%.

The STOXX Europe SXXP, -0.49% was lower midday local time, while the FTSE 100 FTSE, -0.36% ticked down about 0.4%.

See:How a ‘disorderly’ U.S. dollar is amplifying the stock-market rout and adding to volatility

What companies are in focus?

Shares of Home Depot Inc. HD, -4.22% fell nearly 4% in pre-market trade after a price target cut, to $204 from $251, at Instinet.

Dick’s Sporting Goods Inc. DKS, -1.79% said in a filing that foot traffic has plummeted, and noted it would close stores for the next two weeks. Shares were down in pre-market trading and have lost half their value over the past 12 months.

BJ’s Wholesale Club Holdings BJ, -0.43% shares rose in pre-market trade after a price target upgrade.

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2020-03-19 13:01:14Z
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