U.S. stock futures were higher early Friday morning after growing worries of a resurgence in coronavirus cases sent equity prices plunging.
Dow Jones Industrial Average futures traded 355 points higher, implying a Friday opening jump of around 395 points. S&P 500 and Nasdaq-100 futures also pointed to a positive Friday start for the two indexes.
The Dow, S&P 500 and Nasdaq on Thursday all recorded their biggest one-day losses since mid-March, posting losses of at least 5.3%. Thursday's declines put the major averages on pace for their biggest weekly losses since March 20, when they all dropped at least 12%.
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Still, Morgan Stanley Investment Management's Andrew Slimmon said: "Given the magnitude of the rally, it would shock me if we had a one day sell-off and that's it."
"The stocks that are up the most from the lows are still the risk-on, high beta, value, small-cap stocks," Slimmon, who is a managing director and senior portfolio manager at the firm, told CNBC's "Squawk Box Asia" Friday morning Singapore time. "They're still the big winners and I would suspect that there's more pain to come near-term before the market clears out kind of this excessive speculation that we've seen recently."
Thursday's losses came after data compiled by Johns Hopkins University showed the number of new coronavirus cases has risen in states like Arizona, South Carolina and Texas as they continue their reopening process. Still, Treasury Secretary Steven Mnuchin told CNBC's Jim Cramer the U.S. can't shut down the economy again.
Overall, more than 2 million coronavirus cases have been confirmed in the U.S. along with over 100,000 deaths.
Stocks had been ripping higher prior to this week, as investors cheered the prospects of the economy recovering as states and countries eases quarantine measures.
"We had gone straight up more than 30% without a real sell-off, so you're due for one, and I don't think it's the worst thing in the world," said JJ Kinahan, chief market strategist at TD Ameritrade. "As more states get back, the question becomes: Are they going to ramp up fast enough to please Wall Street? What you're seeing is it'll be hard to do that."
Despite Thursday's sell-off, the S&P 500 and Dow remained more than 37% above the intraday lows reached on March 23. Most of those gains have been driven by stocks that would benefit from the economy reopening, including airlines, cruise lines and retailers.
"Some of these stocks may have gotten ahead of their skis," said Kinahan. "When you see some of the airlines being priced at the levels they were before this all started when they say they're going to do 60% of their business just doesn't make sense."
American, Delta and United ended Thursday's session down more than 20% each for the week while Southwest has lost 14%. Banks such as JPMorgan Chase, Citigroup, Wells Fargo and Bank of America — which have surged amid expectations of improving economic activity — are all down over 12% for the week.
Consumer sentiment data along with the latest U.S. import and export numbers are scheduled for release Friday morning.
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Source: cnbc.com