U.S. stock-index futures pointed to a slightly higher open on Thursday, suggesting major indexes could open near record levels, as investors focus on strong corporate earnings and a healthy economic backdrop rather than the ongoing trade disputes between China and the U.S.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average
YMU8, +0.08%
rose 19 points to 25,555, while those on the S&P 500
ESU8, +0.11%
were up 3 points to 2,858. Futures for the Nasdaq-100
NQU8, +0.07%
were up 3.5 points to 7,475. The premarket gains for all three came to less than 0.1%.
On Wednesday, the S&P 500
SPX, -0.03%
broke a four-day win streak by closing fractionally lower at 2,857.70, holding less than 0.5% from the closing all-time high of 2872.87 hit on Jan. 26. Declines in consumer staples, energy and industrials offset modest gains in the technology, financials and health-care sectors. The Dow Jones Industrial Average
DJIA, -0.18%
declined 45.16 points, or 0.2%, to 25,583.75.
On the upside, the Nasdaq Composite Index
COMP, +0.06%
advanced 4.66 points, or less than 0.1%, to 7,888.33, extending its wine streak to seven sessions, its longest stretch of uninterrupted gains since March 12. Recent advances have taken the Nasdaq within about 50 points of the record close of 7932.24 set on July 25.
For the week, the Dow is set to gain 0.5%, the S&P 500 is on pace to advance by 2.6% and the Nasdaq is on track for a weekly return of 1.7%, as of Wednesday’s close.
What’s driving the market?
Stock markets in the U.S. have remained relatively resilient despite trade tensions between Washington and Beijing running hot in the background. On Wednesday, China warned that duties imposed by President Donald Trump’s administration on some $50 billion of Chinese imports set to be enacted on Aug. 23, would be matched and China’s Ministry of Commerce said that the country “has to retaliate as necessary.”
However, after getting knocked lower on Wednesday, China markets also have shown some bounce, with Shanghai Composite Index
SHCOMP, +1.83%
gaining 1.8% and the Shenzhen A Share index
399106, +2.65%
surging 2.7%, a rise that could help provide some signs, at least momentarily, to U.S. investors that the market of the world’s second-largest economy isn’t unraveling on trade clashes as it also battles a domestic slowdown.
Catching investors’ attention early Thursday were new sanctions on Russia over a nerve-agent attack, which knocked the Russian ruble
USDRUB, +0.7658%
and Moscow stocks
RSX, -4.09%
ERUS, -4.22%
lower.
Wednesday’s trade action was marked by weakness in the energy sector, as crude-oil futures for the U.S.
CLU8, +0.06%
fell to a nearly seven-week low, and earnings from prominent companies, including Walt Disney Co.
DIS, -2.21%
came in weaker than estimated.
However, bullish market participants believe that quarterly results have been stellar and the domestic economy is sufficiently strong to take aim at new highs, even as the bull market approaches its 10th year.
What data are in focus?
In the latest economic data, initial jobless claims fell more than expected in the latest week, while the July producer price index was flat, compared with expectations for a 0.2% rise.
What are market participants saying?
“Things are looking good in the U.S. in terms of earnings and data, but things aren’t as rosy if you look to China, emerging markets or Europe. Weakness in those regions could eventually become a headwind for the U.S.,” said Suzanne Hutchins, senior portfolio manager of the $1.5 billion Dreyfus Global Real Return Fund, which is run out of the investment boutique Newton.
“The U.S. market seems to be shrugging off any sort of risk right now, since the S&P 500 is near a record and volatility is low. We think that’s wrong, as trade would become quite challenging for the global economy.”
Which stocks are in focus?
Rite Aid Corp. shares
RAD, +1.16%
fell 3% in premarket trading after a merger between the retailer and Albertsons Cos. was called off on Wednesday.
Yelp Inc.
YELP, -1.27%
late Wednesday reported better-than-expected earnings and raised its full-year profit outlook. Shares jumped 15% in premarket trading.
Viacom Inc.
VIAB, -1.38%
reported third-quarter earnings that beat expectations, but sales were below forecasts.
Booking Holdings Inc.
BKNG, -1.59%
tumbled 8% before the bell after it issued a soft full-year outlook.
Roku Inc.
ROKU, -0.36%
surged 11% in premarket trading a day after it reported better-than-expected revenue and unexpectedly swung to a narrow profit.
L Brands Inc.
LB, -1.19%
the parent company of Victoria’s Secret, gained 2.7% in premarket trading after it reported second-quarter sales that beat expectations and gave a positive outlook.
IAC
IAC, +7.69%
late Wednesday posted better-than-expected second-quarter earnings and sales, boosted by strong results at its recent spinoffs, including Match Group Inc.
MTCH, +17.28%
and Angi Homeservices Inc.
ANGI, -1.30%
.
Tribune Media Co.
TRCO, +0.99%
said Thursday it has terminated the $3.9 billion deal to be acquired by Sinclair Broadcast Group Inc., originally announced in May 2017, and said it has sued Sinclair for breach of contract.
Media company Gannett Co.
GCI, -1.56%
posted second-quarter revenue that fell more than expected, though it raised its adjusted 2018 EBITDA outlook.
Vista Outdoor Inc.
VSTO, -0.36%
reported adjusted second-quarter earnings that missed expectations and sales that were below forecasts. The company also lowered its 2019 sales outlook.
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Source : MTV
