(Reuters) – Wall Street was set to open largely unchanged on Monday after last week’s strong gains as investors kept an eye on the economic impact from the coronavirus outbreak and company updates, with people starting to return to work in China.
The death toll from the epidemic has surpassed that of Severe Acute Respiratory Syndrome (SARS) from 2002-2003 and the World Health Organization said the number of cases outside China could be just “the tip of the iceberg”.
“Investors are quiet worried about the overly negative impact of the coronavirus on the global economy,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Apple Inc slipped 1.1% in premarket trading as its supplier Foxconn struggled to fully resume its factories in China.
Analysts expect China’s smartphone sales may plunge by as much as 50% in the first quarter, as many retail shops remain shuttered for an extended period and companies struggle to restart production.
On the other hand, electric carmaker Tesla Inc jumped 7.2% as its Shanghai factory returned to service with assistance to help it cope with the spreading epidemic.
At 8:32 a.m. ET, Dow e-minis slipped 0.08%. S&P 500 e-minis remained unchanged and Nasdaq 100 e-minis gained 0.05%.
Wall Street’s main indexes slipped from record highs on Friday, but still the S&P 500 posted its best week in eight months and the Nasdaq recorded its biggest weekly gain in more than a year following China’s efforts to limit the impact of the virus.
This week, a slew of earnings reports from consumer discretionary companies and U.S. retail sales data could help determine to what extent the coronavirus is hitting consumer demand.
Markets will also watch for U.S. President Donald Trump’s $4.8 trillion budget proposal for fiscal year 2021 on Monday, and Fed Chair Jerome Powell’s two-day address to the U.S. Congress starting Tuesday.
Among other stocks, L Brands Inc climbed 7.2% after a report the retailer was nearing a deal to sell Victoria’s Secret to Sycamore Partners.
Eli Lilly dropped 4% after experimental drugs from the U.S. pharmaceutical firm and Switzerland’s Roche failed to halt Alzheimer’s disease.
Shopping centers owner Taubman Centers Inc surged 52.6% as it agreed to be bought by larger peer Simon Property Group Inc in a deal valued at $3.6 billion.
Other U.S. mall owners Kimco Realty Corp, Macerich Co and Tanger Factory Outlet Centers Inc jumped between 1.5% and 13.5%.