By Peter Nurse
Investing.com – U.S. stocks are seen opening sharply lower Monday, continuing last week’s negative tone amid concerns about rising Covid cases while the quarterly corporate earnings season continues.
At 7 AM ET (1100 GMT), the Dow Futures contract was down 370 points, or 1.1%, S&P 500 Futures traded 30 points, or 0.7%, lower and Nasdaq 100 Futures dropped 55 points, or 0.4%.
The major indices last week recorded their first negative in four, with the Dow Jones Industrial Average falling 0.5%, the S&P 500 dropping 1%, and the Nasdaq Composite falling 1.9%, its worst week since May.
Rising numbers of U.S. Covid-19 cases are now weighing on sentiment, with the Delta variant now the dominant strain worldwide. U.S. cases were up 70% last week over the previous week and deaths are up 26%, with outbreaks occurring mainly in parts of the country with low vaccination rates, Rochelle Walensky, director of the U.S. Centers for Disease Control and Prevention, said on Friday.
The seven-day-average number of daily cases is now more than 26,000, more than twice its June low of around 11,000 cases, according to CDC data, with the greatest uptick in cases occurring in Arkansas, Florida, Louisiana, Missouri and Nevada – all states with below-average vaccination rates.
This week will be busy in terms of corporate earnings, with nine Dow components and 76 S&P companies set to provide quarterly updates. Prologis (NYSE:PLD), PPG Industries (NYSE:PPG) and JB Hunt (NASDAQ:JBHT) are due to report Monday, while IBM (NYSE:IBM) is set to provide numbers after the close.
Zoom Video Communications (NASDAQ:ZM) will also be in the spotlight after the company announced a $14.7 billion all-stock deal to buy cloud-based call center operator Five9 (NASDAQ:FIVN) in its largest-ever acquisition.
Turning to economic data, the National Association of Home Builders will release its latest survey results on Monday, amid signs the housing market may be cooling off.
Elsewhere, oil prices weakened Monday after a group of top producers agreed over the weekend to boost output, overcoming an internal spat that threatened the stability of the market.
The group, which includes members of the Organization of the Petroleum Exporting Countries and allies like Russia, agreed to add 400,000 barrels a day every month from August 2021 onwards, with Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Russia also receiving higher baselines against which their output cuts are measured from May 2022.
At 7 AM ET, U.S. crude futures traded 2.7% lower at $69.64 a barrel, while the Brent contract fell 2.6% to $71.76.
Additionally, gold futures fell 0.6% to $1,804.65/oz, while EUR/USD traded 0.2% lower at 1.1778.