Investing.com — Mounting fears that a surge in new coronavirus cases would derail the economic recovery weighed heavily on stocks on Wednesday, causing a more than 940-point rout in the Dow.
New infections in the U.S. have reached all-time highs this week as public health officials struggle to ring-fence the virus. Hot spots have spread across the country and hospitalizations are rising. Many fear new lockdowns, which would follow new restrictions imposed in Europe in a fresh wave of the pandemic there.
Selling was broad-based, with the Dow Jones Industrial Average, S&P 500 and NASDAQ Composite each down more than 3%.
The mood was darkened by the reality that stimulus was not forthcoming, at least not until after next week’s election. Without a new round of money injected into the economy to support spending, the economic recovery could be in peril, according to recent speeches by officials from the Federal Reserve.
The heavy selling pressure comes during a big week for corporate earnings reports. More are on tap for Thursday, especially big oil companies and four of the Fab 5 tech companies.
Here are three things that could affect the markets tomorrow:
1. Profits from the oil majors
Oil prices have plunged this week on worries that demand is not coming back, or is returning unevenly as the pandemic refuses to disappear. On Wednesday the government released data that showed inventories rose more than expected, to 4.3 million barrels last week.
Oil majors are reporting earnings and analysts will be listening closely to what they say about the remainder of the year and their prospects for next year. ConocoPhillips (NYSE:COP) is expected to report a loss of 31 cents a share on revenue of $5.2 billion, while Royal Dutch Shell (LON:RDSa) PLC ADR (NYSE:RDSa) is expected to eke out earnings per share of 4 cents on revenue of more than $46 billion.
2. Big tech storms Wall Street after hours
Most of the so-called FANG gang is reporting earnings at practically the same time after Thursday’s closing bell.
Google-parent Alphabet (NASDAQ:GOOGL) Inc Class C (NASDAQ:GOOG) is expected to report earnings of $11.30 a share on revenue of $42.7 billion, Amazon.com Inc (NASDAQ:AMZN) is expected to report EPS of $7.37 on revenue of $92.6 billion, Apple Inc (NASDAQ:AAPL) is expected to report EPS of 71 cents a share on revenue of just under $64 billion, and Facebook Inc (NASDAQ:FB) is seen reporting $1.89 a share on revenue of $19.7 billion.
The estimates are based on analysts tracked by Investing.com.
3. Starbucks reveals how pandemic has altered coffee-drinking habits
Has the pandemic significantly altered coffee-drinking habits, or have people maintained their caffeine fixes despite inconveniences like not being able to camp out for hours with their laptops without ordering refills?
This is the question for Starbucks Corporation (NASDAQ:SBUX), which is seen reporting earnings of 31 cents a share on revenue of $6 billion. The Seattle-based coffee selling giant was forced to make changes to its stores to encourage drive-up service and mobile ordering. Analysts will be listening to hear what the company says about foot traffic.