U.S. stock-index futures were pointing to losses for the main benchmarks Friday morning in the final trading session of the week and month, with futures holding lower following data on September spending and incomes, as investors reacted to disappointing results from heavyweights Amazon.com Inc. and Apple Inc.
How are stock-market indexes trading?
S&P 500 futures
fell 24 points, or 0.5%, to 4,563.
Futures for the Dow Jones Industrial Average
down 63 points, or 0.2%, to reach 35,550.
declined 136 points, or 0.9%, to 15,627.
On Thursday, the Dow Jones Industrial Average
rose 240 points, or 0.68%, to 35,730, the S&P 500
increased 45 points, or 0.98%, to 4,596, a record and the Nasdaq Composite
gained 212 points, or 1.39%, to 15,448, also a record.
What’s driving the market?
The S&P 500 and Nasdaq closed at records on Thursday, lifted by earnings news and hopes for a Congressional budget deal as investors shook off a disappointing third-quarter economic growth report. But downbeat results from two big technology companies were weighing on Friday’s action.
Reporting late Thursday, Apple
missed revenue expectations for the first time since late 2018, amid slower-than-expected sales of iPhones and wearables. Amazon.com
reported an earnings drop of nearly 50% and provided a disappointing holiday shopping forecast as it struggles with supply-chain and staffing issues. Amazon shares were down nearly 5% in premarket trading, while Apple stock fell nearly 4%.
“Companies will feel the heat going forward with all input costs rising from wages, financing, and commodities including energy,” said Steen Jakobsen, chief investment officer at Saxo Bank, in a note to clients.
“However, the VIX forward curve still suggests low nervousness among equity investors over the near-term future. The 4,560 level in the S&P 500 futures is a critical pivot point for today’s trading which will determine which way we go,” Jakobsen said.
Rising bond yields were also a focus for investors, with the yield on the 10-year Treasury note
up 3 basis points to 1.610%. That follows the biggest one-day yield rise since Oct. 19 on Thursday, which snapped a four-day slide.
Traders have been factoring in expectations for tighter Federal Reserve monetary policy as debt yield curves flatten across the globe. Many expect the Fed will announce a plan next week for tapering its $120 billion in monthly bond purchases.
Markets largely brushed aside European Central Bank President Christine Lagarde’s attempt on Thursday to push back against rising market expectations for policy interest rate increases by the end of next year.
In U.S. economic data, a report on personal incomes and spending showed that personal income slumped 1% in September after a 0.2% gain in the prior month, while consumer spending rose 0.6%. Economists were looking for a 0.4% decline in personal income and spending came in line with expectations.
In other data, the University of Michigan October consumer-sentiment index will be released at 10 a.m.
Which companies are in focus?
Shares of Chevron Inc.
rose 2% in premarket trading after the energy giant reported third-quarter profit and revenue that soundly beat forecasts, on surging crude oil and natural gas prices nearly quadrupled
Shares of Western Digital Corp.
slipped 1% in premarket trading, after disappointing profit guidance from the disk-drive and flash memory chip group.
Stock in Starbucks Corp.
fell over 4%, after the coffee giant’s fourth-quarter sales growth slowed, falling short of the company and Wall Street’s expectations.
Shares of Meta Materials Inc.
a Nova Scotia-based material-science company, rose 5% on the heels of a 5% gain during the regular session following Facebook Inc.’s
announcement that it was changing its name to Meta.
Zendesk Inc. shares
slid 21% after the customer-service platform said it would buy Momentive Global Inc.
the parent company of online questionnaire platform SurveyMonkey in a $4.13 billion stock deal. Momentive Global shares slid 10%.