por admin » Mié May 13, 2020 12:42 am
Stock futures little changed following losses from the previous session
PUBLISHED TUE, MAY 12 20206:05 PM EDTUPDATED 3 HOURS AGO
Maggie Fitzgerald
@MKMFITZGERALD
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U.S. stock futures were little changed in overnight trading and pointed to losses at the open on Wednesday, after a sharp sell-off in the previous session.
Dow futures was up just 12 points, but implied a Wednesday opening loss of about 117 points. Futures for the S&P 500 and Nasdaq also pointed to Wednesday opening losses for the two indexes.
Stocks fell on Tuesday, after spending much of the session around the flatline, as investors parsed through the latest developments surrounding the economy reopening.
The Dow Jones Industrial Average lost more than 450 points, reversing its 160 points gain earlier in the day. The S&P 500 also registered a steep loss, dropping 2.05%.
Stocks poised to benefit from economies reopening — retail, real estate, banks and airlines — dragged down the major averages. Disney fell 3%, Nike dropped 2.9% and JPMorgan lost 3.3%. Mall operator Simon Property Group gave up a 10% gain to close in the red.
“You have a market just waiting to see how the economy opens,” Quincy Krosby, Prudential chief market strategist, told CNBC. “After nearly six sessions of the market moving higher, you’ve got the S&P 500 at an important technical level, which is 3,000, and it needs a catalyst to climb above that. One of the main catalysts will be if the economy can open up without an increase in cases.”
Chart of the three major market averages showing the Nasdaq is positive year-to-date
The Nasdaq Composite snapped its six-session winning streak on Tuesday, as investors cooled off from buying technology stocks. The average lost 2.06%; however, it just barely held its positive year-to-date gain of 0.3%. Apple and Microsoft lost 1.1% and 2.3%, respectively. Netflix fell 2% and Amazon dropped 2.2%.
Dr. Anthony Fauci said Tuesday that a vaccine will be essential in stopping the coronavirus spread, but warned it will be a while before a usable one is available. Fauci added the U.S. could face more “suffering and death” if states start to reopen too quickly.
“Even though market participants know Dr. Fauci’s stand on opening the economy too soon, to hear him testify also helped to underpin the view that if you do move too quickly you run the risk of causing cases to rise,” Krosby said.
Plus, Los Angeles County’s public health director said Tuesday the region’s stay-at-home order will “with all certainty” last through July. While several southern states have already started to let nonessential businesses resume operations.
“You also had concern regarding the U.S. China relationship and where that is heading,” Krosby added, after Sen. Lindsey Graham introduced legislation to require China to cooperate with a coronavirus investigation or face sanctions.
“Given everything that the market has to focus on, the last thing the market needs is to see the resumption of a trade war,” Krobsy added.
Traders will be looking for clarity on future Federal Reserve actions when Fed Chairman Jerome Powell speaks on current economic issues on Wednesday at 9:00 a.m. ET.
Powell’s “comments tomorrow are going to be scrutinized by the market to see how he plans thwart the issue of negative interest rates,” said Krosby.
The Labor Department will release its producer price index for the month of April at 8:30 a.m. on Wednesday. Analysts polled by Dow Jones are expecting a drop of 0.5% in April, following March’s decline of 0.2%. Producer prices have dropped during the pandemic, pulled down by declines in the costs of goods such as gasoline and services.
Sony and Cisco Systems report quarterly earnings on Wednesday.
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