U.S. stock futures tumble on reports of NY Ebola case

By Hideyuki Sano

TOKYO (Reuters) – U.S. stock futures tumbled while safe-haven assets such as the yen and U.S. bonds gained on Friday after a doctor who returned to New York City from West Africa tested positive for Ebola.

S&P 500 mini futures fell as much as 0.7 percent, slipping from two-week highs hit the previous day on budding optimism from corporate earnings and the global economy.

European shares looked set to slip, with France's CAC 40 seen falling by as much as 0.7 percent and Germany's DAX and Britain's FTSE by 0.5 percent.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent, though Japan's Nikkei share average bucked the trend rising 1.0 percent, led by gains in drug companies.

"Just when markets got some relief on the world economy, we had this news. Obviously people who have just made bullish bets (on the economy) will close their positions as no one can tell exactly what is going to happen," said the head of currency trading at a Western bank's Tokyo branch.

The first diagnosed case of Ebola in the world financial hub of New York sent investors rushing to traditional safe-haven assets.

As U.S. bond prices gained, the 10-year U.S. yield fell back to 2.250 percent from Thursday's two-week high of 2.300 percent.

In the currency market, the yen gained 0.3 percent to 107.95 yen to the dollar.

Risk asset prices had risen on Thursday after upbeat U.S. corporate earnings, solid U.S. economic data, and an unexpected uptick in euro zone business sentiment helped ease concerns that the global economy was losing momentum.

Results from Caterpillar Inc and 3M Co reassured investors that companies with large overseas revenue streams could deliver solid profits, despite concerns about global economic growth.

The markets had ignored positive earnings earlier this month, when the world's share prices hit multi-month lows, overwhelmed by fears that sluggishness in Europe and Asia could deal a severe blow to the U.S. economy as well.

But a steady flow of solid earnings helped to ease many such concerns for now.

With 177 of the S&P 500 companies having posted third-quarter results, 69.5 percent have beaten expectations, better than the 67 percent beat rate over the past four quarters, and higher than the 20-year average of 63 percent, Thomson Reuters data showed.

New claims for U.S. unemployment benefits also held below 300,000 for a sixth straight week last week.

In the euro zone, a survey showed businesses performed much better than anyone expected this month, even though it also pointed to strong deflationary pressure in the region.

The euro drew some support from the surprise strength in the euro zone data, but was still near a two-week low of $1.2614 hit on Thursday. It last stood at $1.2657.

Investors are turning cautious ahead of Sunday's release of the European Central Bank's stress test results on the euro zone's 130 biggest banks.

In addition, some focus could fall on the parliamentary election in Ukraine on Sunday. Stability could benefit the European economy, which has suffered from the fall in trade with Russia on tit-for-tat sanctions between the West and Moscow.

"I suspect one often overlooked reason for the market's rebound since the middle of this week was signs of easing tensions between Russia and Ukraine," said Soichiro Monji, chief strategist at Daiwa SB Investments, pointing to progress in gas talks between Russia and Ukraine last week.

President Petro Poroshenko's bloc holds a big lead, but if the populist Oleh Lyashko's Radical party makes a very strong showing, Poroshenko may have the awkward task of seeking the support of a politician who has been sharply critical of his peace plan and his contacts with Russian President Vladimir Putin.

Sunday will also see presidential election in Brazil, where stocks and the currency have suffered on expectations that the current President Dilma Rousseff is likely to beat her rival, Aecio Neves, who is seen as more market-friendly.

The Bovespa stock index hit a six-month low while the Brazilian real slumped to a 9-1/2-year low on Thursday.