Dow set to jump 300 points as market rally extends for a third day

U.S. stock index futures pointed to a higher open on Wednesday as the market continues to bounce back from a steep sell-off that was sparked by worries over the coronavirus.

Around 8:20 a.m. ET, Dow Jones Industrial Average futures were up by 261 points, indicating a gain of 301 points. S&P 500 and Nasdaq 100 futures also pointed to a higher open.


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Stock futures turned higher in overnight trading after Reuters said a Chinese TV media outlet had reported that a research team at Zhejiang University had found an effective drug to treat people with the new coronavirus. The news agency, citing traders, suggested this was a reason for the move higher in stocks.

CNBC has not verified the media reports. However, the World Health Organization said in a statement: “There are no known effective therapeutics against this 2019-nCoV.”

Markets remain attuned to the coronavirus outbreak as confirmed cases in China near 25,000, claiming the lives of 490 people. U.S. President Donald Trump said during Tuesday’s State of the Union address that the U.S. is “working closely” with the Chinese government to contain the virus.

Stocks rallied on Tuesday as the market recovered from a huge sell-off on Friday, with the Dow closing 407.82 points higher. Corporate earnings remain in focus, with a number of companies weighing the impact of the coronavirus on forecasts.

Disney on Tuesday topped first-quarter earnings expectations on both the top and bottom lines, but warned of a $175 million hit to its theme parks as a result of the coronavirus outbreak.

Meanwhile, Ford shares slid on Tuesday after the carmaker posted a fourth-quarter loss and disappointing 2020 guidance, warning of virus-related manufacturing shutdowns.

On the data front, ADP and Moody’s Analytics said U.S. private payrolls rose by 291,000 in January. That’s the biggest monthly payrolls gain in nearly five years. Stock futures extended their gains on the data release.

Final January services PMI (Purchasing Managers’ Index) readings are expected at 9:45 a.m. ET, followed by ISM non-manufacturing data at 10 a.m.

Source: cnbc.com | Original Link

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