U.S. stock futures rose to start the trading week, but gains were capped by worries about an uptick in coronavirus cases.
Shares of big technology stocks Apple and Microsoft increased in premarket trading. Shares which are bets on the economy reopening were mixed. Airlines and casino shares were lower, but retailers were higher in premarket trading.
Dow Jones Industrial Average futures were higher by 222 points, or 0.9%. The move implied a flat to slightly higher open. S&P 500 futures and Nasdaq-100 futures added 0.9% prior to the opening bell.
The major U.S. stock averages are coming off their fourth weekly gains in five weeks. Both the Dow and S&P 500 advanced at least 1% last week, while the Nasdaq Composite surged more than 3%.
Apple and Microsoft each gained at least 0.5% in premarket trading as investors bought into technology shares which have show resilience during the pandemic.
Shares of Gap were higher by 5% in premarket trading. Kohl’s and Costco were also higher. Walmart gained after an upgrade by UBS.
But shares of American Airlines were lower by 7% after it said it was seeking new financing. United was also lower.
The number of newly confirmed coronavirus cases across the U.S. and elsewhere in the world continues to increase, raising questions about the global economic recovery.
“The areas of concern that weighed on stocks Friday afternoon were reinforced over the weekend,” Adam Crisafulli of Vital Knowledge wrote in a note. “Governments look set to proceed with reopening, but the real driver of growth will be behavioral normalization and that is very likely to be impended by the steady negative coronavirus news flow.”
The U.S. reported more than 30,000 additional coronavirus cases on Friday, the highest number of confirmed one-day infections since May 1, data compiled by Johns Hopkins University showed. Nevada, Florida, California and Arizona have also reported record-high single-day infections.
The recent coronavirus uptick in some states led Apple to reclose some of its stores. Meanwhile, a trade group said cruise lines voluntarily suspended all trips until Sept. 15.
“There’s a war going on between the bulls and bears, with each seizing every little data point to buttress their opposing arguments,” said Vito Racanelli, market intelligence analyst at Fundstrat Global Advisors, in a note.
“I do think that perhaps the market has gone past its recovery ‘straight-up’ phase, as investors realized coronavirus (COVID-19) was not a world ender,” Racanelli said. “But the data remains mixed and Covid-19 fear remains strong, and it’s understandable.”
The S&P 500 has ripped more than 41% higher since hitting an intraday low on March 23. For the quarter, the broader market index is up by nearly 20%.
