US futures, oil prices jump on reports of drug breakthrough
U.S. stock index futures pointed to a higher open on Wednesday. It comes after Reuters said a Chinese TV media outlet had reported that a research team at Zhejiang University had found an effective drug to treat people with the new coronavirus. The news agency, citing traders, suggested this was a reason for the move higher in stocks.
CNBC has not verified the media reports. At around 6 a. m. ET, Dow futures indicated an implied open of nearly 300 points, while futures in the S& P 500 and Nasdaq also pointed higher.
Oil prices jumped more than 3% on Wednesday, following media reports that scientists may have developed an effective drug to prevent China’s fast- spreading coronavirus. International benchmark Brent crude traded at $55.40 Wednesday evening, up around 2.7%, while U. S. West Texas Intermediate (WTI) stood at $50.82, almost 2.5% higher.
Both crude benchmarks
had climbed more than 3% earlier in the session. Brent and WTI have fallen more than 20% since climbing to a peak in early January. OPEC and nonOPEC partners, sometimes referred to as OPEC+, are thought to be considering further output cuts this month, with energy market participants increasingly concerned that the virus outbreak could squeeze oil demand growth.
Hong Kong leader Carrie Lam has said those coming from mainland China will be put into compulsory quarantine for 14 days. The city’s chief executive said Wednesday that two cruise terminals would also be closed in an attempt to limit the cross-border flow of people.
Some medical staff have been on strike for three days, demanding a full border closer. Lam said there have now been 21 confirmed cases of the coronavirus in Hong Kong. A batch of supplies from the U.S. arrived in Wuhan on Feb. 4, and some American businesses and institutions have also offered support, Hua Chunying, spokeswoman for the Chinese foreign ministry said during a daily briefing on
Wednesday, according to an official translation. “We have come to a crucial stage in terms of epidemic prevention and control,” the spokeswoman said. She noted both China and the U.S. are in close communication through diplomatic and health channels. On trade, Hua said China hoped the U.S. would “work with” the Asian country on implementing the consensus that their leaders have reached. Hong Kong’s Cathay Pacific has appealed to all of its employees to take three weeks of unpaid leave, as the airline carrier struggles with falling demand caused by the coronavirus outbreak.
Employees “have the option to take three weeks of unpaid leave” in the period between March 1 and June 30, the airline said in a statement to CNBC.
“In view of the Novel Coronavirus outbreak and also significant drop in market demand, we just announced massive capacity cuts yesterday,” the statement said. “Preserving cash is the key to protecting our business. We have already been taking multiple measures to achieve this. Today, we are appealing to all employees to participate in the special leave scheme,” the airline said.
Taiwan has temporarily suspended entry for all Chinese citizens who live in mainland China, effective from Thursday. Taiwan, which is not a member of the World Health Organization due to China’s objections, has 11 confirmed cases of the coronavirus. China considers self-governing Taiwan a wayward province to be brought under its control. Mainland Chinese markets closed higher on Wednesday, building on gains in the previous session after a sharp fall at the start of the week. The Shanghai composite closed up 1.25% on Wednesday, while the Shenzhen component jumped over 2.4%. Other major Asia-Pacific markets also rose, while European markets were predicted to edge higher.
Over 1,800 passengers on a Dream Cruises ship docked in Hong Kong are being tested for the new coronavirus, after some crew members reported they have fevers and other symptoms, according to the city’s health authorities.