US futures gain as China moves to contain virus

Bloomberg

US equity-index futures gained on Wednesday as China took steps to contain the spread of a deadly virus that had rattled international markets. Treasuries and the dollar were steady.
Contracts on the three main American equity indexes all rose, with Netflix Inc and International Business Machines Corp climbing in the premarket as traders digested their earnings. The Stoxx Europe 600 Index fluctuated before edging higher as a slump in Italian banks weighed on the benchmark gauge after Luigi Di Maio’s resignation as his party’s leader fueled talk of an early election.
Carmakers lagged after US Treasury Secretary Steve Mnuchin dangled the prospect of retaliatory tariffs on automobile imports if countries go ahead with digital tax plans.
Chinese shares erased losses after Beijing said it will start a nationwide screening effort to tackle the outbreak. The yen dipped after gaining Tuesday on news of the contagion and potential disruption to spending during China’s week-long Lunar New Year. The yuan steadied, after tumbling the most in almost five months in onshore trading.
While the death toll from the respiratory virus rose to nine, a sense that China is coming to grips with containing it gave traders the chance for bargain-hunting following the declines. Investors stayed on the alert, however, with millions set to travel during the holiday and news that the deadly pathogen had spread to Hong Kong. Helping sentiment were growth data that topped estimates in South Korea, continuing a recent run of macro reports that support the case for a recovery in global economic expansion.
“I would expect a lot of people — candidly, like we are — that are looking for opportunities to buy rather than sell” amid the dip in stocks caused by virus-contagion worries, Lamar Ville re, partner and portfolio manager at Villere & Co, said on Bloomberg TV. “I don’t think this is going to be the beginning of the end.”
Elsewhere, West Texas crude slipped to about $58 a barrel as ample global supplies offset the loss of exports from Libya.
Companies including Texas Instruments Inc, Intel Corp and Procter & Gamble Co will post results. Policy decisions are due from central banks in Canada, Indonesia and the euro region.
The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.
Futures on the S&P 500 Index gained 0.4% in New York. Nasdaq 100 Index futures jumped 0.7%. The Stoxx Europe 600 Index climbed 0.2%. Italy’s FTSE MIB Index dipped 0.3%. The MSCI Asia Pacific Index climbed 0.6%.
The Bloomberg Dollar Spot Index fell 0.1%. The British pound climbed 0.5% to $1.3112. The euro was little changed at $1.1079. The Japanese yen weakened 0.1% to 109.96 per dollar. The Swiss franc weakened 0.3% to $0.9714.
The yield on 10-year Treasuries dipped less than one basis point to 1.77%. Germany’s 10-year yield fell two basis points to -0.26%. Britain’s 10-year yield gained one basis point to 0.639%. Italy’s 10-year yield climbed less than one basis point to 1.372%.
West Texas Intermediate crude fell 0.6% to $58.02 a barrel. Gold weakened 0.1% to $1,556.14 an ounce. Natural gas increased 0.5% to $1.91 per mmbtu.