Dow set to drop about 400 points at the open as coronavirus cases outside China surge - CNBC

Stock futures stateside pointed to sharp declines on Wall Street at the open on Monday as the number of coronavirus cases outside China surged.

As of 10:47 p.m. ET Sunday, Dow Jones Industrial Average futures were 410 points lower, pointing to an implied opening plunge of 403.41 points for the index on Monday. S&P 500 and Nasdaq futures also pointed to declines at Monday's open.

The moves came as investors continue to watch developments surrounding the coronavirus outbreak that was first reported in China, but has spread rapidly in other countries especially South Korea and Italy, which reported a spike in the number of confirmed cases in recent days. On Sunday, Seoul raised its coronavirus alert to the "highest level," with the latest spike in numbers bringing the total infected to more than 750 — making South Korea the country with the most cases outside mainland China.

Meanwhile, outside of Asia, Italy has been the worst affected country so far, with more than 130 reported cases and three deaths.

""I've now come to the view that equity markets, global equity markets, have to reprice to take into account or fully discount the dramatic economic impact that all of this is going to have," Jonathan Pain, author of The Pain Report, told CNBC's "Street Signs" on Monday morning in Asia. "I believe that repricing … has just started and I think it's gonna be approximately 20 to 25% in the next month or so."

"I don't think there's a letter in the alphabet which adequately describes the profile of the economic shock that … we're beginning to see," Pain said. "Of course there will be a recovery at some point in time, however, we don't know when that point in time is." In the earlier days following the outbreak, many economists had predicted a V-shaped recovery, which describes downturns that see a steep fall before recovering sharply.

Fears surrounding the economic impact of the spread of the coronavirus led stocks on Wall Street to sharp losses on Friday, with the Dow dropping more than than 200 points and seeing its first close below 29,000 since Feb. 4. The S&P 500 slipped 1.1% to 3,337.75 while the Nasdaq Composite declined by 1.8% to 9,576.59.

Friday's losses sent the major averages lower on a weekly basis for the first time in three weeks.

— CNBC's Fred Imbert contributed to this report.

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Dow set to drop about 400 points at the open as coronavirus cases outside China surge - CNBC
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