US STOCKS-Futures drop on fears of second virus wave, bleak economic view

(For a live blog on the U.S. stock market, click LIVE/ or
type LIVE/ in a news window)
* Airlines, cruise operators and casinos tumble
* Banks extend slide as Fed sees rates near zero until 2022
* Boeing supplier Spirit tumbles after announcing layoffs
* Futures fall: Dow 3.09%, S&P 2.49%, Nasdaq 1.57%

(Adds details, quote; updates prices)
By Medha Singh and Devik Jain
June 11 (Reuters) - U.S. stock futures fell sharply on
Thursday on jitters over a second wave of coronavirus infections
and a grim forecast for the economy from the Federal Reserve.
Shares of airlines, cruise operators and casinos slumped as
a Reuters analysis showed new cases rose in the United States
after five weeks of declines. United Airlines Holdings Inc UAL.O , American Airlines
AAL.O , Norwegian Cruise Line Holdings Ltd NCLH.N , Royal
Caribbean Cruises Ltd RCL.N and Wynn Resorts WYNN.O slumped
between 9% and 13% in premarket trading.
Wall Street's fear gauge, the CBOE volatility index .VIX ,
rose above 30 points for the first time since June 1.
"The market has been rallying because they're looking to
2021 and saying we're going to get past this and then things
will get sort of back to normal," said Sean O'Hara, president of
Pacer ETF Distributors in Malvern, Pennsylvania.
"One thing that really could change the trajectory here
would be if we have a big bounce in a second wave. That's the
big fear."
The easing of lockdowns and a massive stimulus program to
help the economy bounce back quickly to pre-pandemic levels have
been pivotal in the S&P 500 .SPX staging a stunning recovery
from a deep, virus-induced selloff.
The S&P 500 .SPX and the Dow Jones .DJI indexes ended
lower on Wednesday after Fed Chair Jerome Powell acknowledged it
could take years for the millions of people laid off due to
COVID-19, to get back to work, even as he reiterated his promise
to support the virus-hit economy for years. A Labor Department report showed about 1.54 million people
applied for state unemployment benefits for the week ended June
6, roughly in line with estimates. Boeing Co BA.N shed 9.3% after its top supplier Spirit
AeroSystems Holdings Inc SPR.N announced a 21-day layoff for
staff doing production and support work for Boeing's 737
program. Spirit AeroSystems tumbled 13.2%. At 8:32 a.m. ET, Dow e-minis 1YMcv1 were down 834 points,
or 3.09%. S&P 500 e-minis EScv1 were down 79.25 points, or
2.49% and Nasdaq 100 e-minis NQcv1 were down 158.75 points, or
1.57%.
Shares of banks, which tend to benefit in a higher rate
environment, slipped on Thursday as Fed policymakers saw the key
overnight interest rates remaining near zero through at least
2022. Bank of America Corp BAC.N , Citigroup Inc C.N and
JPMorgan Chase & Co JPM.N fell between 3.8% and 6%.
Online food delivery firm Grubhub Inc GRUB.N rose 10%
after Europe's Just Eat Takeaway.com NV TKWY.AS agreed to buy
its U.S peer in an all-stock deal for $7.3 billion. The deal, if
completed, would create the world's largest food delivery
company outside China.