Stocks Stumble With Virus Concerns Back in Focus: Markets Wrap

Stocks in Europe dipped and U.S. equity futures fell as restrictions to curb escalating coronavirus cases dented some of the optimism over earnings and plans for additional stimulus. The dollar edged higher.

The Euro Stoxx 600 index opened lower, led by banks and energy companies. S&P 500 and Nasdaq 100 futures slipped after U.S. shares eked out a record high Thursday as tech stocks advanced. Equities in Hong Kong slid after a report that an area of the city would go intolockdown. Yields on Treasuries and German bunds edged lower. Crude oil declined for a second day.

The British pound weakened after Prime Minister Boris Johnson said the U.K.’s third lockdown could last into the summer, while disappointingeconomic data added to investors’ misgivings.

This week’s global equity rally, spurred by expectations of economic support and the rollout of vaccines, is pausing as traders weigh still-troubling Covid-19 trends. President Joe Biden, who is pushing for $1.9 trillion in additional spending, unveiled a strategy to combat the virus while warning the pandemic will worsen before it improves. Restrictions intensified from Germany and the U.K. to Hong Hong, and the European Central Bankcautioned that the euro area is headed for a double-dip recession.

“The pandemic is far from being outside of the investment landscape,” said Sebastien Barbe, a strategist at Credit Agricole. “Even some Asian countries are now announcing lockdown measures, including Hong Kong, and there are still huge uncertainties about vaccination campaigns worldwide.”

Biden cautioned that another 100,000 lives could be lost over roughly the next month in the U.S. The nation’s infectious-disease chief Anthony Fauci said the seven-day average of new U.S. infections suggests the virus “might actually be plateauing.” Germany’s coronavirus fatalities passed 50,000 while the U.K. suffered its worst day in the pandemic.

Elsewhere, Bitcoin fluctuated around $30,000 after earlier tumbling below that level, as the controversial boom in digital coins fizzles.

These are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index fell 0.6% by 8:16 a.m. in London.
• S&P 500 futures lost 0.5%.
• The MSCI Asia Pacific Index dropped 0.7%.
• The MSCI Emerging Markets Index slipped 0.8%.

Currencies

• The Bloomberg Dollar Spot Index climbed 0.3%.
• The yen was at 103.67 per dollar, dipping 0.2%.
• The euro was little changed at $1.2161.
• The British pound weakened 0.5% to $1.3663.

Bonds

• The yield on 10-year Treasuries dipped one basis point to 1.1%.
• Germany’s 10-year yield dipped on basis point to -0.51%.
• The U.K.’s 10-year yield fell two basis points to 0.32%.

Commodities

• West Texas Intermediate crude was at $52.30 a barrel, down 1.6%.
• Gold dropped 0.4% to $1,861.75 an ounce.

— With assistance by Sophie Caronello

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