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Market Snapshot: Stock futures struggle for direction after Dow, S&P 500 set records

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Stock-index futures were mixed Monday, after the Dow Jones Industrial Average and the S&P 500 ended last week at records following a disappointing jobs report that was seen keeping the Federal Reserve from tightening policy.

What are major indexes doing?
  • Futures on the Dow Jones Industrial Average
    YM00,
    +0.31%

    rose 110 points, or 0.3%, to 34,796.
  • S&P 500 futures
    ES00,
    +0.09%

    edged up 3.80 points, or 0.1%, to 4,229.
  • Nasdaq-100 futures
    NQ00,
    -0.26%

    fell 35 points or 0.3%, to 13,674.75.

On Friday, stocks shook off a much-weaker-than-expected April jobs report Friday, with the Dow
DJIA,
+0.66%

and S&P 500
SPX,
+0.74%

both ending at records, while the Nasdaq Composite
COMP,
+0.88%

outpaced its major benchmark peers but still posted a weekly loss.

What’s driving the market?

Analysts said Friday’s disappointing April jobs report, which saw U.S. nonfarm payrolls rise by 266,000 versus a consensus forecast for an increase of 1 million, continued to provide a positive backdrop for equities.

Read: Here’s why the Dow and S&P 500 hit records despite a weak April jobs report

“In our view, the jobs report shows a surprising pause in the labor market recovery, coming at a time when the underlying fundamentals and alternative data are pointed towards acceleration,” wrote analysts at Credit Suisse, in a note.

“Nevertheless, this report should delay any discussion of withdrawing accommodation until a decisive labor market rebound takes place,” they said. “As such, we continue to expect positive equity returns, but at the expense of increased near-term volatility.”

See: Weak jobs report belies U.S. recovery under way — but are international stock markets a better bet now?

Investors were tracking developments around a cyberattack on a vital pipeline that delivers around 45% of fuel consumed on the East Coast. Georgia-based Colonial Pipeline over the weekend said it closed the pipeline was the target of a ransomware attack.

Gasoline futures
RB00,
+1.39%

were up more than 1%, though analysts said pump prices may avert a rise if operations are restored within a few days. Oil futures also moved higher.

Tech and other growth-oriented stocks, which are expected to grow earnings faster than their peers, were buoyed Friday as the jobs data sparked a retreat for Treasury yields. Those shares appeared set to resume their recent underperformance, however, as yields pushed to the upside on Monday.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.581%

rose 1.2 basis points to 1.572%. Yields and bond prices move in opposite directions.

Meanwhile, a strong earnings season was moving into its final stage.

Through Friday, 88% of S&P 500 companies had reported earnings covering the first quarter, according to FactSet. The index is now reporting the highest year-over-year growth in earnings since for the first quarter since 2010, said John Butters, senior earnings analyst at FactSet, in a note.

Analysts also expect double-digit earnings growth for the remaining three quarters of 2021. These above-average growth rates are due to a combination of higher earnings for 2021 and an easier comparison to unusually weak earnings in 2020 due to the negative impact of COVID-19 on numerous industries, Butters said.

Which companies are in focus?
  • U.S. Foods Holding Corp.
    USFD,
    +1.10%

    reported earnings and revenue that topped forecasts and said it wouldn’t provide guidance due to pandemic-related uncertainty. Shares were inactive in premarket trade.
  • Shares of Energizer Holdings Inc.
    ENR,
    +2.33%

    rose more than 1% after the battery maker delivered results that blew past Wall Street forecasts.
  • Marriott International Inc.
    MAR,
    +2.88%

    shares were down more than 2% after the hotel operator announced earnings that beat estimates but revenue that fell short.

Europe Markets: European stocks and U.S. equity futures mixed after records, with commodity stocks in the lead

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