Wall Street set to slip on rising virus cases; eyes on stimulus deal

(Reuters) – U.S. stocks were set to dip at the open on Tuesday as surging coronavirus cases threatened to further hamper a slowing economic revival, while investors awaited progress in ongoing negotiations for a fresh COVID-19 relief package.

FILE PHOTO: A trader wearing a protective face mask walks, as the global outbreak of the coronavirus disease (COVID-19) continues, at the New York Stock Exchange (NYSE) in the financial district of New York, U.S., November 19, 2020. REUTERS/Shannon Stapleton/File Photo

Most residents in California, the nation’s most populous state, faced new restrictions on Monday after record coronavirus case numbers and hospitalizations, while officials in New York warned similar restrictions could come into effect soon.

Nationwide, COVID-19 infections are at their peak, with an average of 193,863 new cases reported each day over the past week, according to a Reuters tally of official data, and health officials warned that the worst is yet to come.

“The rise in cases across the U.S. seems finally to have galvanized American lawmakers into action, although the $900 billion discussed is certainly well below the mooted levels of late summer, and even this amount may not make it through unscathed,” said Chris Beauchamp, chief market analyst at IG.

Market participants are closely watching whether policymakers will be able to clinch an agreement on a long-awaited COVID-19 relief bill and a $1.4 trillion spending bill, with Friday eyed as a possible deadline to avoid a government shutdown.

The U.S. Congress will vote this week on a one-week stopgap funding bill to provide more time for lawmakers to reach a deal on both spending and pandemic relief.

At 08:40 a.m. ET, Dow E-minis were down 95 points, or 0.32%, S&P 500 E-minis were down 14.75 points, or 0.40%. Nasdaq 100 E-minis were down 31 points, or 0.25%.

The S&P 500 and the blue-chip Dow fell on Monday, but the Nasdaq closed at record levels as investors returned to technology mega-cap stocks that have thrived from the pandemic-induced shift to work from home.

Positive developments related to the COVID-19 vaccine have in the recent weeks helped investors look past the surge in infections and raise bets on a steady economic recovery next year.

Pfizer Inc rose 0.6% in premarket trading as it cleared the next hurdle in the race to get its COVID-19 vaccine approved for emergency use, after the U.S. health regulator released documents that did not raise any new issues about its safety or efficacy.

Tesla Inc fell about 2% after it unveiled plans to raise up to $5 billion in a share offering.

Home builder Toll Brothers Inc slipped 3.3% after a disappointing home delivery forecast for the first quarter.

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