Current Futures: Dow -147.00, S&P -17.80, NASDAQ -23.50

Overnight markets continue to be driven by risk-aversion, as swine flu becomes the latest on the list of possible threats to the global economy. Asian markets closed barely above the break-even line, erasing the gains seen after the opening bell, while European markets moved lower from the opening bell.

U.S. futures fell from the opening of the Sunday session, as investors considered that the financial effort to contain the flu threat is too large, and will slow the economic recovery. For now, the S&P 500 futures are holding slightly above the 848.00 support, but the market may see some strong downside action if this area fails. “Financial markets were driven by risk-aversion on the Monday morning, as each news update on the possible swine flu pandemic goes from bad to worse,” Trade Team said. “Treasuries, the dollar and the yen rallied, as investors sold financial assets deemed risky,” they added. 

Only a handful of shares rose in Europe. One of those was Merck, after its first quarter reports met analysts’ expectations of a 76% drop. The U.K. insurer Aviva also rose overnight, as first quarter sales rose 5%, despite the industry’s decline. 

The swine flu helped drug-makers advance overnight, both in the Asian and in the European equity markets. GlaxoSmithKline rose 4% this morning on the Ftse, following a 1.2% gain of the Health Care Index in the Asian markets. On the other hand, swine flu is likely to reduce airline traffic, especially international travel. As such, airline and travel agencies posted significant declines. British Airways and Lufthansa dropped 11%, while Carnival, Thomas Cook and Tui –Europe’s biggest travel and tourism agencies, dropped on average 7%. 

Overnight, the Nikkei rose 18.35 points (0.21%) to 8,726.34. The Australian S&P/Asx gained 19.30 points (0.52%) to 3,731.60. The U.K. Ftse dropped 65.13 points (1.57%) to 4,090.86, while the German Dax declined 98.65 points (2.11%) to 4,575.67.

Crude oil for May delivery was recently trading at $49.75 per barrel, down $1.80.

Gold for May delivery was recently trading up $1.80 to $915.90.