Stock Futures Decline, With Tech Earnings in Focus
|01/27/2021 | 07:49am|
By Will Horner
U.S. stock futures fell amid concerns about Covid-19 vaccine distribution and as investors awaited a bumper day of earnings reports.
Futures tied to the broad S&P 500 index were down 0.7% and Dow Jones Industrial Average futures fell 0.8%. Futures tied to the technology-heavy Nasdaq-100 fell 0.2%.
Delays in the rollout of Covid-19 vaccines, coupled with lingering lockdown measures, marked a "double whammy" of bad news for investors, said Hani Redha, a portfolio manager at PineBridge Investments.
"I think the market expected that by now we would be talking about loosening, not tightening restrictions," he said. "On the vaccine rollout, this is very problematic for the near term. It is very critical for shaping the growth bounce back, and these issues are just adding more delay to that."
AstraZeneca rebutted reports Wednesday that it had pulled out of a meeting with European Union officials, as a spat between the two groups regarding a vaccine shortfall deepened.
The Biden administration said Tuesday it would purchase enough additional coronavirus shots to vaccinate most of the U.S. with a two-dose regimen by the end of summer.
Investors were also gearing up for one of the busiest days of the quarterly earnings season, with investors results earnings from AT&T and Blackstone, while Boeing is set to report ahead of the opening bell.
Earnings from Apple, Facebook and Tesla are due just after the market closes. Investors are eager to see how the tech giants fared during a quarter marked by continued lockdowns and stay-at-home orders.
"The bar for tech stocks to beat is quite high because we were still in lockdown and yet they do seem to be doing well relative to those higher expectations," said Mr. Redha.
Shares of Microsoft gained 2.3% ahead of the opening bell after the company reported record quarterly sales Tuesday. Its shares closed at a new high Tuesday.
Walgreens Boots Alliance was up 6.9% in premarket trading after the drugstore chain named Starbucks operating chief Rosalind Brewer as its next chief executive.
Earnings have pleased the market so far and investors continue to bet on economic support from the Federal Reserve and a possible stimulus plan from the Biden administration. On Tuesday, the S&P 500 hit a new intraday high before slipping in the final minutes of trading.
"The Fed and the new Biden stimulus plans -- it's all a very positive backdrop for the equity market," said Brian Walsh, Jr., a portfolio manager at Walsh & Nicholson Financial Group. "They are saying we aren't going to let the markets fail right now and, with bond yields as low as they are, there is nowhere else to be."
The Fed is expected to leave monetary policy unchanged and Chairman Jerome Powell will likely underscore the bank's commitment to supporting the economy with low interest rates and bond buying for the foreseeable future. Mr. Powell will likely face questions about the health of the economy and how long the Fed's stimulus measures will remain in place.
GameStop surged over 80% in premarket trading, as day traders, propelled by social media, looked ready to pile into the retailer for another day. The stock rose 113% Tuesday amid a battle between individual investors and hedge funds who are shorting the stock. After markets closed Tuesday, Tesla Chief Executive Elon Musk tweeted "Gamestonk!!" in an apparent reference to the frenzied trading.
Data on durable goods orders will be out at 8:30 a.m. E.T. The figures are expected to show an eighth consecutive monthly rise in orders, highlighting manufacturing's resilience during the pandemic.
In commodities markets, Brent crude, the international benchmark for oil, rose 0.1% to $55.72 a barrel. Gold prices fell 0.7% to $1,838.70.
Overseas, the pan-continental Stoxx Europe 600 was down 1.1%, while in Asia, stock indexes were mixed. Japan's Nikkei 225 rose 0.3%, Hong Kong's Hang Seng fell 0.3%, while in mainland China, the Shanghai Composite edged up 0.1%.
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires