US stock futures tumble 4% on coronavirus fears in pre-market trade

The price of futures contracts for the S&P 500 index, a Wall Street benchmark, fell more than 4% on Sunday as off-hours trading for US equity markets resumed, a sign that investors fear the toll from the fast-spreading coronavirus will deepen.

Italy, the country hardest hit by the virus in Europe, essentially locked down much of its wealthy north, including the financial capital Milan, in a drastic attempt to contain an outbreak that saw the number of deaths leap sharply on Sunday.

More than 107,000 people have been infected worldwide and 3,600 have died, according to a Reuters tally. In Italy, the number of cases jumped 25% in a 24-hour period to 7,375, while deaths climbed 57% to 366. It was the largest daily increase for both readings since the contagion came to light on Feb. 21.

Contracts for the S&P 500 emini fell 4.2% to 2839. The decline indicates how much the S&P 500 might fall when trading begins on Monday.

The implied yield on the futures contract for the 10-year US Treasury note fell below 0.5% for first time. The benchmark Treasury hit a historic low on Friday, closing at 0.707%, as markets reacted to the coronavirus. It was the first time the 10-year note had traded below 1%.

Fear of the economic damage the coronavirus epidemic poses sent stocks lower on Friday, with the benchmark S&P 500 notching its 10th decline in 12 sessions.

Corporations around the world have begun issuing profit warnings and curbing activities as the virus spreads.

Pacific Investment Management Co (PIMCO), one of the world’s largest investment firms, warned clients the outbreak is likely to cause a relatively mild and short recession though tight credit markets could worsen the downturn.

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