US Stocks To Open with Huge Losses on Coronavirus Outbreak in Italy, Slide in Tech Stocks

Update: (9:10 am EST)

Dow Jones futures now down by more than 900 points!

S&P 500 futures have lost 100 points, Nasdaq futures have again fallen by more than 300 points!

Earlier:

24 February 2020 (8:27 am EST)

There is still an hour to go before the opening bell in US stock markets and US stock futures are sliding down without any support.

Dow Jones futures were trading 800 points lower a couple of minutes ago!

Tech index Nasdaq had lost 300 points at one point during the European session.

All these losses and the crash in global stock markets was triggered by a sudden and widespread outbreak of coronavirus in Italy ( first major country out side of Asia to see coronavirus cases). Italy has seen a sudden spike in coronavirus affected cases in its affluent northern regions. Worries about the economic impact of this virus have dragged down European markets. Italy’s main index FTSE MIB has lost more than 1,000 points today.

US stock futures are affected by the slide in European stock markets and the impact of coronavirus crisis in China on the American tech companies. In pre open market trading, shares of the most Nasdaq companies are trading down. Microsoft shares have fallen by more than 4% in pre open trade. Nokia, Apple and Alibaba shares are down by more than 3%.

The good thing about these highly negative  pre market moves is; after the opening bell a recovery will be expected due to technical factors. It may, or may not happen immediately after the opening bell. If Dow Jones opens with a loss of 800 points; its RSI indicator will dive into deeply oversold region and that can spur buyers into action.

Legendary investor Warren Buffett has also been making positive statements to assure nervous investors, especially about Apple’s stock.

The intraday scenario may look gloomy, but the overall trend in US stock markets still has solid foundations and even an 800 points’ drop will keep Dow Jones above 28,000. Still quite close to the milestone of 30,000.

For day trading, bears will have to wait for a healthy recovery in US stocks, perhaps until the second half on this session. For bulls, the start of the bounce will be a good intraday chance to score some profit. Today’s closing levels will indicate how US stock markets intend to trade through this week.

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