Market Snapshot: Dow futures sag amid earnings deluge and China’s efforts to contain viral outbreak

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Futures contracts for the three main U.S. stock benchmarks early Thursday were trading lower as investors parse earnings from a pair of Dow components and an update on monetary policy from Europe’s central bank, while eyeing China’s struggles to contain a potential viral outbreak.

What are major indexes doing?

Dow Jones Industrial Average futures YMH20, -0.25%  were off 83 points, or 0.3%, at 29,057, those for the S&P 500 index ESH20, -0.14% were off 6.05 points, or 0.2% to 3,313.75, while Nasdaq-100 futures NQH20, -0.04% retreated 8.75 points, or 0.1%, at 9,186.75.

On Wednesday, the Dow DJIA, -0.03%  slipped 9.77 points, or 0.03%, to 29,186.27, while the S&P 500 index SPX, +0.03%  closed up 0.96 points or 0.03% at 3,321.75. The Nasdaq Composite Index COMP, +0.14% was up 12.96 points or 0.14% at 9,383.77.

What’s driving the market?

Reports on U.S. quarterly earnings poured in Thursday with investors eager to glean more news about the health of the domestic economy in the midst of a historic run-up in the stock market. However, Wall Street was keeping one eye on an Asian flu that has gripped Chinese markets and threatens to hurt an already-sluggish economy, with a potential to harm global economic growth.

Worries about the coronavirus accelerated somewhat after Beijing locked down additional cities in an effort to contain the spread of the disease, which is being compared with a deadly outbreak of the severe acute respiratory syndrome epidemic in 2002-03 that killed about 800 people.

“China’s lockdown news over the virus scare is weighing on the global markets,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a daily research note.

Singapore has confirmed a first case of the coronavirus that has led to the quarantine of the Chinese city of Wuhan, Channel News Asia reported on Thursday.

See: Here’s how the stock market has performed during past viral outbreaks, as China locks down 3 cities

Reports on earnings from the likes of Dow components Procter & Gamble PG, +0.18% and Travelers Cos. Inc. TRV, +0.31% will help to guide investors’ mood beyond the Asian influenza. Fellow Dow constituent Intel Corp. INTC, +3.60%, will report after the close of trade Thursday.

Meanwhile, the European Central Bank concluded a monetary policy meeting on Thursday by holding interest rates steady, but investors will be watching for signs that President Christine Lagarde will seek to adjust stimulative policies in the future — amid tepid inflation and economic growth — during an 8:30 a.m. Eastern Time press conference.

On the economic front, the number of Americans who applied for unemployment benefits in mid-January rose slightly, but layoffs remain near a 50-year low and there’s no sign of deterioration in the strongest U.S. labor market in decades. Initial jobless claims increased by 6,000 to 211,000 in the seven days ended Jan. 18, the government said Thursday.

Which stocks are in focus?

Shares of P&G PG, +0.18%  were down 1.2% in premarket trading Thursday, after the consumer-products company reported a fiscal second-quarter profit that beat expectations but revenue that rose less than forecast.

Traveler’s TRV, +0.31%  stock, meanwhile, slumped 2.4% in premarket trading Thursday, after the insurer reported profit and revenue that topped expectations but net premiums written that came up a bit shy.

Shares of Comcast Corp. CMCSA, +0.30% gained 1% in premarket trading after the media giant topped revenue and earnings estimates for the fourth quarter.

American Airlines Group Inc. AAL, +0.44%  reported fourth-quarter profit and load factor that rose better than Wall Street had expected, while revenue met forecasts. The company’s stock fell 1.2% before the start of trade Thursday.

Shares of PayPal Holdings Inc. PYPL, -0.56% rose 1.5% in premarket trading Thursday after the company announced a partnership with China’s UnionPay International.

JetBlue Airways Corp.’s JBLU, +3.91% stock were unchanged in premarket trade Thursday, after the airline topped earnings estimates for the fourth quarter.

Shares of Southwest Airlines Co. LUV, -0.11% sank 0.7% in premarket trading Thursday after the air carrier reported a fourth-quarter profit and load factor that missed expectations, while revenue rose a little above forecasts. Chief Executive Gary Kelly said operational performance in 2019 was reduced by an estimated $828 million due to the grounding of Boeing Co.’s BA, -1.39% 737 MAX planes.

Kimberly-Clark Corp. KMB, -0.14%  reported fourth-quarter earnings and sales that slightly beat expectations Thursday morning, while raising its dividend. The consumer-products company’s stock rose 1.1% before the start of trade.

Which stocks are in focus?

Government bond yields were retreating Thursday, with the yield on the 10-year U.S. Treasury TMUBMUSD10Y, -1.82%  own 2.5 basis points, to 1.743%.

Oil prices were in retreat, with the price of a barrel of West Texas Intermediate crude for March delivery CLH20, -1.85%  falling $1.02, or 1.8%, to $55.71. In precious metals, gold for February delivery GCG20, -0.06%  was down 90 cents, or 0.1% to $1555.80 an ounce.

The U.S. dollar was virtually unchanged relative to a basket of six rivals, according to the dollar DXY, -0.10%  

In Europe, stocks SXXP, -0.54%   fell after the European central bank left key monetary policy unchanged as expected

In Asia overnight, stocks sold off sharply, with the China CSI 300 000300, -3.10%  losing 3.1%, Hong Kong’s Hang Seng index HSI, -1.52%  down 1.5% and Japan’s Nikkei 225 NIK, -0.98%  losing 1%.

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