By Medha Singh
(Reuters) – Futures indicated that the Dow Jones Industrials index would shed more than 300 points at the open on Thursday after the rapid spread of the coronavirus outside China deepened worries about growth and corporate earnings.
The number of new infections in China, the source of the outbreak, was overtaken for the first time by fresh cases elsewhere on Wednesday, most notably in Italy and Iran.
Adding to worries, the U.S. Centers for Disease Control and Prevention confirmed an infection in California in a person who reportedly did not have relevant travel history or exposure to another known patient.
“In the recent week, markets have come to realize that the outbreak is much worse and are now realistically pricing in the impact of the virus on the economy,” said Philip Marey, senior U.S. strategist at Rabobank.
“In that sense it’s a bit of a catching up from the relative optimism that was there in the beginning when markets thought (the virus) will be contained to China with some minor outbreak outside.”
After hitting a record high last week, the S&P 500 <.SPX> has declined for five straight sessions and has lost about $1.84 trillion in market capitalization this week alone.
Industry analysts and economists continued to sound the alarm as they assessed the impact of the coronavirus, with Goldman Sachs saying U.S. firms will generate no earnings growth in 2020.
Bank of America slashed its world growth forecast to the lowest level since the peak of the global financial crisis.
At 8:47 a.m. ET, Dow e-minis <1YMcv1> were down 334 points, or 1.24%. S&P 500 e-minis <EScv1> were down 40.5 points, or 1.3% and Nasdaq 100 e-minis <NQcv1> were down 129.25 points, or 1.46%.
Hotel operator Marriott International <MAR.O> warned of a nearly $25 million hit to its monthly fee revenue due to the epidemic. Its shares fell 2.5% in premarket trading.
All the 30 blue-chip components of the Dow Jones Industrials <.DJI> were trading in the red, with Microsoft Corp <MSFT.O>, Apple Inc <AAPL.O> and Intel Corp <INTC.O> down between 2.3% and 3.2%.
Gilead Sciences <GILD.O>, however, jumped 5% as the drugmaker said it had started two late-stage trials to test its experimental drug in patients with cases of illness caused by coronavirus.
(Reporting by Ambar Warrick and Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila and Anil D’Silva)