U.S. stock-index futures pointed to a modestly higher open on Tuesday, suggesting some stabilization in stocks following a stretch of losses that took the Nasdaq to its lowest level in weeks.
What are the main benchmarks doing?
Dow Jones Industrial Average futures YMU8, +0.01% rose 31 points, or 0.1%, to 25,317, while S&P 500 futures ESU8, +0.16% added 7.3 points, or 0.3%, to 2,810. Nasdaq-100 futures NQU8, +0.18% added 21 points, or 0.3%, to 7,222.
On Monday, the Dow DJIA, -0.57% S&P SPX, -0.58% and Nasdaq Composite Index COMP, -1.39% all slumped, leaving the Nasdaq down by 3.8% over the past three sessions. Both the S&P and the Nasdaq have dropped for three straight trading days, while the Dow has dropped for two.
With one session left in July, the Dow is up 4.3% for the month, while the S&P and Nasdaq have tacked on 3.1% and 1.6%, respectively.
What’s driving markets?
Investors continued to digest an onslaught of quarterly earnings reports. While the season has generally come in well ahead of expectations, there were some high-profile misses, including from Silicon Valley juggernauts Facebook Inc. FB, -2.19% and Twitter Inc. TWTR, -8.03% Both stocks have tumbled in recent sessions, and the pressure they put on technology stocks have weighed on the broader market.
Not only are tech stocks among the largest in the market, but they have also been among the biggest gainers in 2018, meaning broader indexes could be vulnerable in the event they continue to slide.
What are strategists saying?
“Broadly speaking, earnings are pretty positive, and I don’t think there’s anything out there that’s going to cause a quick downturn that’s going to last. The market will go on digesting bad news, as it has been doing throughout the year, on much worse news,” said Liz Young, senior investment strategist at BNY Mellon Investment Management.
“My opinion has been that there are a lot of overreactions, especially in the tech sector. We’ve seen so much strength there that the sector had room for a correction—they were already feeling frothy—but nothing catastrophic has really come out. I don’t expect things to turn markedly lower for the remainder of the year.”
Which economic reports are on tap?
Consumer spending rose a solid 0.4% in June as foreshadowed by last Friday’s strong report on U.S. economic growth in the second quarter. Analysts had been expecting a 0.5% increase.
Check out: MarketWatch’s Economic Calendar
The Federal Reserve’s policy makers are due to start a two-day meeting. They are expected to signal on Wednesday that more interest-rate hikes are coming, but not at this current meeting.
In other central bank news, the Bank of Japan bucked market expectations and kept its ultra-easy monetary policy, sending the dollar up against the yen USDJPY, +0.67%
Which stocks are in focus?
Pfizer Inc. PFE, +0.47% reported adjusted second-quarter earnings that beat expectations, along with revenue that was ahead of forecasts. Shares of the Dow component were little changed before the bell.
Procter & Gamble Co. PG, -0.47% reported adjusted fourth-quarter earnings that beat expectations but revenue that was slightly below consensus forecasts. The consumer-products giant also gave a soft outlook for its 2019 fiscal year, sending shares down 2.1% in premarket trading.
Archer Daniels Midland Co. ADM, -0.55% reported adjusted second-quarter earnings and revenue that both came in sharply ahead of expectations. The stock jumped 4% in premarket trading.
Cummins Inc. CMI, -1.26% reported second-quarter earnings that missed expectations, but revenue that was ahead of forecasts. Shares rose 2.8% before the bell.
BP PLC BP, -0.22% reported a jump in its second-quarter earnings, supported by higher oil prices. U.S.-listed shares gained 1.6% in premarket trading.
Lumber Liquidators Holdings Inc. LL, +2.14% sank 9.8% in premarket trading after it reported a surprise second-quarter loss, though revenue was ahead of expectations.
Naked Brands Group Inc. NAKD, +14.68% jumped 34% in premarket trading after it said its subsidiary, Bendon Limited, has joined CVS Health Corp. CVS, +1.14% to bring Heidi Klum Intimates Solutions line to more than 4,000 U.S. locations.
Charter Communications Inc. CHTR, +2.66% reported second-quarter earnings that beat expectations.
Qualcomm Inc. QCOM, -1.04% launched a tender offer to repurchase up to $10 billion in stock. Shares rose 2.7% in premarket trading.
Shopify Inc. SHOP, -7.54% jumped 1.7% in premarket trading after it reported second-quarter earnings that beat expectations.
Steve Madden Ltd. SHOO, +0.37% reported adjusted second-quarter earnings that beat expectations, along with revenue that topped consensus analyst forecasts.
Shire PLC SHP, +0.71% reported a sharp increase in its second-quarter earnings, supported by booking lower costs and higher sales.
What are other markets doing?
Oil futures CLU8, -1.08% and gold futures GCZ8, -0.47% were falling, while the dollar index DXY, +0.03% was little changed. European stocks SXXP, +0.05% traded mixed, after Asia finished mixed.
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