By Sruthi Shankar
(Reuters) – U.S. stock indexes were set to open lower on Thursday as the coronavirus epidemic fanned concerns of a slowdown in China’s economy, while a mixed batch of earnings from technology firms also weighed on sentiment.
The flu-like virus, which has taken 170 lives in China and spread to over 15 countries, has disrupted global travel and led several companies to suspend operations in China, rattling financial markets around the world.
The World Health Organization’s Emergency Committee is due to reconvene on Thursday to decide whether to declare the virus a global emergency.
“The biggest concerns we had last year were trade policy uncertainty and slower global growth and we were kind of expecting global growth to pick up,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
“So it’s (the epidemic) kind of a set back. But valuations were pretty high so it’s an excuse for markets to take profits.”
Futures mostly held on to their losses after the U.S. Commerce Department reported the domestic economy expanded at a 2.1% annualized rate in the fourth quarter, falling short of the Trump administration’s 3% target, but in line with economists’ expectations.
At 9:00 a.m. ET, were down 184 points, or 0.64%. S&P 500 e-minis were down 21.25 points, or 0.65% and were down 38.75 points, or 0.43%.
The main Wall Street indexes remain on course for their second weekly decline, despite relatively upbeat fourth-quarter earnings reports.
Overall, analysts expect profit for S&P 500 companies to be flat in the fourth quarter versus a 0.6% decline estimated at the start of the season, according to Refinitiv data.
Microsoft Corp (O:) gained 3.8% in premarket trading after it reported quarterly sales and profit above Wall Street expectations, driven by acceleration of Azure cloud computing revenue growth.
Facebook Inc (O:) fell 6.9% after the social media giant said growth would continue to slow as its business matured and it reported a surge in quarterly expenses.
Tesla Inc shares (O:), which have surged about 39% this year, jumped 8.1% after the electric carmaker posted its second quarterly profit in a row as vehicle deliveries hit a record.
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