Wall Street set to fall from record highs on fears over new coronavirus case count

(Reuters) – Wall Street was set to open lower on Thursday after scaling record levels in the previous session, as a spike in new coronavirus deaths and cases in China sent investors scurrying for safe havens.

Gold and U.S. Treasuries were in demand as a new diagnostic method pushed the number of new infections in China’s Hubei province to 14,840 on Thursday, up from 2,015 cases reported on Wednesday, while the death toll climbed to 1,367.

Fresh uncertainty about the scale of the epidemic looked set to derail a rally in equities, a day after investors bought on signs that the virus spread was slowing.

“The virus news coming out of China (is) a bit concerning, especially when investors thought it was all behind them,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

“We are also due for at least a little bit of a pullback.”

The S&P 500 .SPX has risen in seven of the last eight sessions. The benchmark index, along with the Nasdaq .IXIC, has set record closing high every day of this week, while the Dow Jones Industrials .DJI settled at an all-time high on Wednesday.

Adding to the downbeat mood was a lackluster revenue and profit forecast from Dow component Cisco Systems Inc (CSCO.O). The network gear maker’s shares dropped 5.5% in premarket trading.

NetApp Inc (NTAP.O) tumbled 13.2% as the data storage equipment maker’s current-quarter profit forecast fell short of expectations.

At 8:41 a.m. ET, Dow e-minis 1YMcv1 were down 169 points, or 0.57%. S&P 500 e-minis EScv1 were down 18.5 points, or 0.55%, and Nasdaq 100 e-minis NQcv1 were down 71.5 points, or 0.74%.

Among other stocks, Caterpillar Inc (CAT.N) rose 0.4% after Goldman Sachs upgraded the construction and mining equipment maker’s shares to “buy”.

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., February 6, 2020. REUTERS/Lucas Jackson

Tesla Inc (TSLA.O) fell 4.2% on the electric car maker’s plans to raise $2 billon by selling shares through a public offering.

The fourth-quarter earnings season is winding down with 351 S&P 500 companies having reported so far. Of those, 70.9% have topped profit estimates, according to IBES data from Refinitiv.

Markets shrugged off a report from the Labor Department that showed underlying consumer prices picked up in January, supporting the Federal Reserve’s contention that inflation would gradually rise toward its 2% target.

Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta and Subhranshu Sahu

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