U.S. Stocks Likely To Extend Yesterday’s Sharp Pullback

Following the sharp pullback seen in the previous session, stocks are likely to see some further downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 696 points.

The downward momentum on Wall Street comes as traders continue to worry about the economic impact of the coronavirus outbreak.

Recent data points to a slowdown in new coronavirus infections in China, but the disease seems to be spreading more rapidly around the rest of the world.

So far, more than 100,000 infections have been confirmed worldwide, and more than 3,300 people have been killed by the virus.

The worries about the outbreak have overshadowed the Labor Department’s usually closely watched monthly employment report.

The report showed much stronger than expected job growth in the month of February, although traders may view the data as old news as the coronavirus fears have ramped up only recently.

The Labor Department said employment surged up by 273,000 jobs in February, matching the upwardly revised spike in January.

Economists had expected employment to increase by about 175,000 jobs compared to the jump of 225,000 jobs originally reported for the previous month.

With the much stronger than expected job growth, the unemployment rate unexpectedly edged down to 3.5 percent in February from 3.6 percent in January. The rate had been expected to remain unchanged.

A separate report released by the Commerce Department showed the U.S. trade deficit narrowed more than expected in the month of January, as the value of imports fell by more than the value of exports.

The Commerce Department said the trade deficit narrowed to $45.3 billion in January from a revised $48.6 billion in December.

Economists had expected the trade deficit to narrow to $46.1 billion from the $48.9 billion originally reported for the previous month.

Extending the volatility seen over the past several sessions, stocks moved sharply lower during trading on Thursday following the rally seen on Wednesday. The major averages more than offset Wednesday’s gains but remain well off last Friday’s lows.

The major averages all posted steep losses on the day. The Dow plunged 969.58 points or 3.6 percent to 26,121.28, the Nasdaq tumbled 279.49 points or 3.1 percent to 8,738.60 and the S&P 500 plummeted 106.18 points or 3.4 percent to 3,023.94.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan’s Nikkei 225 Index nosedived by 2.7 percent, while China’s Shanghai Composite Index slumped by 1.2 percent.

The major European markets have also shown substantial moves to the downside on the day. While the French CAC 40 Index has plummeted by 3.9 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 3.4 percent.

In commodities trading, crude oil futures are tumbling $2.34 to $43.56 a barrel after sliding $0.88 to $45.90 a barrel on Thursday. Meanwhile, after spiking $25 to $1,668 an ounce in the previous session, gold futures are climbing $8 to $1,676 an ounce.

On the currency front, the U.S. dollar is trading at 105.24 yen versus the 106.16 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1322 compared to yesterday’s $1.1237.

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