US stock futures fell, suggesting that major indices will increase losses as investors assess blue chip companies’ earnings and sales prospects.
Futures pegged to the S&P 500 and Dow Jones Industrial Average declined nearly 0.5%, indicating a second day of losses after the opening bubble. Technology-heavy Nasdaq-100 futures were down 0.4%.
Investors look at companies’ first quarter earnings and their outlook for the remainder of the year to assess whether stock valuation is warranted. Strong US economic data has bolstered expectations and fueled the recent rally that saw major indices hover close to record highs. Rising Covid-19 infection levels in some countries and signs that vaccine introduction may be faltering now dampen that optimism.
“All these company stock prices are near or near record highs and we see a lot of people taking money from the table,” said Michael Hewson, chief market analyst at CMC Markets. “There is a general lack of impulses.”
Ahead of the opening bubble, United Airlines fell 2.2% after reporting weaker-than-expected results for the first quarter. Tesla fell another 1%. The carmaker dropped 3.4% on Monday after a fatal accident involving one of its vehicles.
Investors entered the earnings season with high expectations, especially for economically sensitive stocks such as banks and retail, which will gain the most from the reopening of the economy.
“Companies are doing even better than expected – which is shocking in many ways – but that’s also one of the reasons the market has hit record highs,” said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management. . “The earnings season confirms what the stock prices of many companies have already said.”
Lockheed Martin and Abbott Laboratories are among the companies that are scheduled to report earnings before the market opens. Netflix is expected to publish its results after markets close.
“The only risk is that expectations across the board are so high that it will be very difficult to meet,” said Seema Shah, chief strategist at Principal Global Investors.
“We are entering an area – both with revenue and economic data – where it will be very difficult to face positive surprises.”
Investors are also keeping an eye on the bond market, where yields are on the rise for the third consecutive day. The 10-year yield on US Treasuries rose slightly to 1.622% from 1.599% on Monday. Revenues rise as prices fall.
WSJ takes a look at why online investors are depositing money in meme-inspired virtual currency Dogecoin. (Originally published Feb. 8)
Dogecoin, the cryptocurrency made as a joke, expanded its gains after rising more than 8,000% this year. It was up more than 7% to 42 cents, according to CoinDesk. Some users of online forums have said they plan to increase the cryptocurrency to $ 1 by Tuesday, in what some have dubbed “ Doge Day. ”
In commodity markets, Brent oil, the international benchmark for oil, rose 1.3% to $ 67.93 a barrel.
Abroad, the pan-continental Stoxx Europe 600 fell 0.6%.
In Asia, the major stock indices were mixed at the close of trading. Japan’s Nikkei 225 fell nearly 2%, while Hong Kong’s Hang Seng rose 0.1%. The Shanghai Composite Index fell 0.1%.
Investors also keep an eye on the bond market.
Photo:
Courtney Crow / Associated Press
Write to Will Horner at [email protected]
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