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US pre-open: Stocks called to open higher following heavy selloff

By Iain Gilbert

Date: Tuesday 25 Feb 2020

US pre-open: Stocks called to open higher following heavy selloff

(Sharecast News) - US futures were pointing to some small gains ahead of the open as the Dow Jones and Nasdaq looked to recover from their worst days in two years.

As of 1240 GMT, Dow futures were up 0.34%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.33% and 0.59% higher, respectively.

The Dow closed a whopping 1,031.61 points lower on Monday as the number of Wuhan coronavirus cases accelerated outside of China, fuelling concerns about a potential prolonged global economic slowdown as South Korea, Iran, and Italy all reported accelerated cases.

However, AvaTrade's Naeem Aslam believes the selloff was an "overreaction".

Aslam said: "Risk off is the name of the trade today. Investors are tensed due to the fear of a prolonged economic slowdown due to the outbreak of Coronavirus was anticipated. In reality, it was nothing more than the market participants overreacting to news of the virus spreading.

"The fact is, nothing significant occurred yesterday which caused both of these indices to surge the way that they did."

Weighing on sentiment ahead of the bell on Tuesday, United Airlines and Mastercard both cautioned that the outbreak would likely have an impact on their 2020 full-year results.

Elsewhere, the US 10-year sovereign yield dived below 1.40% - its lowest mark since the 2016 dip.

On the macro front, December's S&P/Case-Shiller House Price Index will be posted at 1400 GMT, while consumer confidence figures and the Richmond Fed's manufacturing index for February will follow at 1500 GMT.

In the corporate space, Home Depot shares were up in pre-market trade after topping quarterly estimates, while Mastercard was down after cutting its revenue outlook as a result of the coronavirus.

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