Market Snapshot: Dow futures pull back after indexes post trio of records ahead of Friday jobs report

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U.S. stocks on Friday were set to trade modestly lower after all three benchmarks finished at record highs, with investors awaiting an important report on employment in January, digesting a hectic week of earnings and contending with China’s efforts to contain a fast-moving virus.

How are the major benchmarks faring?

Futures for the Dow Jones Industrial Average YMH20, -0.35% were down 89 points, or 0.3%, at 29,234, those for the S&P 500 ESH20, -0.30% were off 8.45 points, or 0.3%, at 3,336.25, while Nasdaq-100 futures NQH20, -0.35% retreated 30 points, or 0.3%, at 9,425.50.

On Thursday, the Dow DJIA, +0.30% closed up 88.92 points, or 0.3%, to settle at 29,379.77, after carving out a intraday record at 29,408.05. The S&P 500 index SPX, +0.33% rose 11.09 points, or 0.3% to close at 3,345.78. The Nasdaq Composite Index COMP, +0.67% advanced 63.47 points, or 0.7% to settle at 9,572.15. All three indexes closed at new records.

Equity benchmarks are on pace for sizable weekly gains, with the Dow up 4% for the week, the S&P 500 index advancing 3.7%, and the Nasdaq gaining 4.6%, as of Thursday’s close.

What’s driving the market?

U.S. investors have driven equity values to records, attempting to shake off lingering concerns about the outbreak of coronavirus, but the infectious disease is likely to confront bulls against the backdrop of stock values seen by some strategists as elevated.

A closely followed report on the health of the U.S. economy, however, could provide a foundation for at least some hope that viral outbreaks won’t disrupt domestic expansion.

The U.S. likely created 165,000 new jobs in the first month of the year, with the unemployment rate holding at 3.5%, according to a poll of economists by MarketWatch. Average hourly wages are estimated to rise to 0.3% in January from 0.1% in the prior month. The Labor Department report is due at 8:30 a.m. Eastern Time.

Meanwhile, China’s National Health Commission on Friday confirmed more than 31,000 cases of the deadly pneumonia-like virus in the country, with more than 630 deaths. The disease also continues to spread outside the country.

The People’s Bank of China has injected 1.7 trillion yuan ($243.88 billion) of liquidity into the financial system to stem the impact from the Wuhan virus that has hurt travel and economic output, and the government is considering additional stimulus to stem any downturn, according to the Associated Press.

Analysts estimate that China’s gross domestic product will likely slow to 5%, but most of the effects are likely to dissipate after the first quarter.

“The coronavirus outbreak will be temporary and will not change the long-term improvement of China’s economy,” Pan Gongsheng, said a PBOC vice governor at a news briefing Friday.

The disease has made some investors cautious headed into the weekend.

“But with the market already in defensive set-up ahead of the weekend, we could see a further selling as investors continue to hedge weekend risk against additional contagion alerts spreading beyond [Asian] borders,” wrote Stephen Innes, chief market strategist at AxiCorp, in a Friday research note.

Looking ahead, investors may also watch for a report on wholesale trade at 10 a.m., and consumer credit at 3 p.m.

Which stocks are in focus?

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