US equities futures have fallen, suggesting that large indices will increase losses as investors rate the profits and selling prospects of blue chips.
Futures linked to the S&P 500 and the Dow Jones Industrial Average retreated nearly 0.5%, indicating a second day of losses after the opening clock. The tech-heavy Nasdaq 100 futures contract fell 0.4 percent.
Investors are looking at companies’ earnings in the first quarter and their outlook for the rest of the year to determine if valuations on equities are justified. Strong U.S. economic data boosted expectations and fueled the recent march that pushed major indices near record highs. Rising Covid-19 infection levels in some countries and signs that the explosion of the vaccine may be faltering are now dampening optimism.
“All of these stock prices in the company are near or near record highs and we see a lot of people taking money off the table,” said Michael Hewson, chief market analyst at CMC Markets. “There is a general lack of impetus.”
Before the opening bell, United Airlines fell 2.2% after reporting weaker-than-expected results in the first quarter. Tesla fell 1%. The carmaker slipped 3.4% on Monday after a fatal crash involving one of its vehicles.
Investors have entered the earnings season with high expectations, especially for economically sensitive stocks such as banks and retail that will make the most of the reopening of the economy.
“Companies are performing even better than expected – which is shocking in many ways – but it’s also one of the reasons the market is an all-time high,” said Andrew Slimmon, a senior portfolio manager at Morgan Stanley Investment Management. , said. . “The earnings season validates what many companies’ share prices have been saying.”
Lockheed Martin and Abbott Laboratories are among companies that need to report earnings before the market opens. Netflix is expected to post its results after markets close.
“The only risk is that expectations across the board are so high that it will be very difficult to meet,” said Seema Shah, chief strategist at Principal Global Investors..
“We are entering an area – with earnings and economic data – where it will be very difficult to have positive surprises.”
Investors are also watching the bond market, with returns rising for a third consecutive day. U.S. treasury yields for ten years rose to 1,622%, from 1,599% Monday. Yields rise as prices fall.
WSJ looks at why online investors are pouring money into the meme-inspired virtual currency Dogecoin. (Originally published on February 8)
Dogecoin, the cryptocurrency created as a joke, increased its profits after climbing more than 8,000% this year. According to CoinDesk, it rose more than 7% to 42 cents. Some users of online forums have said they plan to push the cryptocurrency to $ 1 by Tuesday, which some call ‘Dog Day’.
In commodity markets, Brent crude, the international benchmark for oil, rose 1.3% to $ 67.93 a barrel.
Overseas, the pan-continental Stoxx Europe 600 fell by 0.6%.
In Asia, the major stock indices were mixed by the close. The Japanese Nikkei 225 fell nearly 2% while Hang Seng rose 0.1% in Hong Kong. The Shanghai Composite Index fell 0.1%.
Investors are also watching the bond market.
Photo:
Courtney Crow / Associated Press
Write to Will Horner by [email protected]
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