Wall Street set to gain on rebound hopes despite jump in virus cases

Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S.

Wall Street’s main indexes were set to open slightly higher in choppy trade on Wednesday as investors’ faith in an economic recovery wobbled on the back of the surge in coronavirus caseloads across the country.

Safe-haven gold caught a bid as the number of confirmed U.S. cases surpassed 3 million, affecting nearly one of every 100 Americans. California, Hawaii, Idaho, Missouri, Montana, Oklahoma and Texas shattered their previous daily record highs for new infections.

“The market probably is going to have a sideways trading affair today … investors are beginning to pay more attention to the rising numbers of new cases and the potential problems that could cause for the recovery,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“If gold continues to move higher, that’s a sign that more and more people are beginning to hedge against risk and it could begin to weigh on equities.”

The Nasdaq notched an intraday record high on Tuesday but all the three main stock indexes finished lower as investors booked profits following a strong run after a batch of upbeat data strengthened the case for a bounce back in economy.

The surge, which has forced authorities to scale back on reopening plans in parts of the country, is only expected to delay economic recovery so far, according to market experts, while their longer-term expectations of growth remain intact.

At 7:59 a.m. ET, Dow e-minis 1YMcv1 were up 36 points, or 0.14%. S&P 500 e-minis were up 6 points, or 0.19% and Nasdaq 100 e-minis NQcv1 were up 46 points, or 0.44%.

Biogen Inc (BIIB.O) jumped 6.9% in premarket trading after the company said it submitted the marketing application for its experimental Alzheimer’s disease therapy, aducanumab, to the U.S. Food and Drug Administration.

Allstate Corp (ALL.N) slipped 2.6% as the U.S. insurer said it would buy National General Holdings Corp (NGHC.O) for about $4 billion in cash, scaling up its auto insurance business at a time when the coronavirus has crushed traffic on roads and reduced claims.

Levi Strauss & Co (LEVI.N) fell about 5% as the denim apparel maker cautioned its business would be hit in the second half of the year, even as its sales have been improving at its reopened stores.

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