U.S. stock-index futures lost ground Wednesday, pointing to a pullback from the previous session’s strong gains, as investors weigh another round of corporate earnings reports and economic data for signs of the impact of the COVID-19 pandemic.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YM00, -2.52% fell 517 points, or 2.2%, to 23,363, while S&P 500 futures ES00, -2.84% were down 72.1 points, or 2.5%, to 2,771. Nasdaq-100 futures NQ00, -1.96% declined 156.25 points, or 1.8%, to 8,536.25.
The Dow DJIA, +2.39% on Tuesday rose 558.99 points, or 2.4%, to end at 23,949.76, while the S&P 500 SPX, +3.05% finished 84.43 points higher, up 3.1%, at 2,846.06. The Nasdaq Composite Index COMP, +3.94% rose 323.32 points or 4%, ending at 8,515.74.
Read:The S&P 500 just posted the most daily swings of 3% or greater in more than a decade
What’s driving the market?
U.S. stock futures fell early Wednesday along with stocks in Europe as investors waited for corporate earnings to gauge the impact of the coronavirus pandemic. E.U. and U.S. federal officials are planning to lift restrictions to help revive their economies, but earnings reports may provide a clearer picture of how the pandemic is affecting business with the global economy headed for a deep recession according to the IMF on Tuesday.
“While many governments are working towards ending lockdown measures, investors are more attentive to the time schedule with which companies may return to catch up with profits,” said Pierre Veyret, technical analyst at ActivTrades, in a note
Johnson & Johnson JNJ, +4.47% , JPMorgan Chase & Co. JPM, -2.74% and Wells Fargo & Co. WFC, -3.97% offered a mixed picture Tuesday, with Goldman Sachs Group Inc. GS, -0.53% , Citigroup Inc. CITI, +1.47% and Bank of America Corp. BAC, -0.79% reporting Wednesday.
Bank of America fell 4.1% in premarket trading Wednesday, after the money center bank reported a first-quarter profit that fell below expectations, amid a $3.6 billion COVID-19-related reserve build, while revenue topped forecasts.
Another fall in crude oil prices also pressured energy stocks on Wednesday after the IEA forecast a record fall in demand.
Airline stocks were up sharply though in off-hours trading after several U.S. airlines late Tuesday reached agreement with the U.S. Treasury for billions in grants and loans aimed at helping them from the coronavirus pandemic.
Investors received further evidence of the early hit to the economy from the pandemic with March retail sales shrinking 8.7%. Economists surveyed by MarketWatch, on average, had forecast a 7.1% monthly fall in sales. The April Empire State Index dropped to a record low of negative 78.2 in April from negative 21.5 in the previous month.
“The bottom line is that the sharp decline in sales in March was the leading edge of what will undoubtedly be a challenging period for much of the retail sector. There will be winners and losers as households adjust their daily lives to ride out the storm and recalibrate their spending habits accordingly,” said Jim Baird, chief investment officer for Plante Moran Financial Advisors.
In other data, March industrial production and capacity utilization are set for release at 9:15 a.m. Eastern. The Federal Reserve’s so-called beige book report, a compilation of anecdotes on economic activity, is due at 2 p.m. Eastern.
Which companies are in focus?
Earnings season continues Wednesday, with shares of Bank of America Corp. BAC, -0.79% off more than 4% in premarket trade after delivering results. Big banks JPMorgan Chase & Co. JPM, -2.74% and Wells Fargo & Co. WFC, -3.97% kicked off earnings season on Tuesday.
Airline shares were in focus after the biggest carriers reached an agreement in principle with the federal government on financial assistance aimed at averting layoffs in the hard-hit industry. Shares of Delta Air Lines Inc. DAL, +5.54% jumped more than 4% in premarket action, while United Airlines Holdings Inc. UAL, +6.88% rose 3.5% and American Airlines Group AAL, +3.33% jumped 6%.
Also see:Airlines say deal on bailout includes provisions for government ownership
UnitedHealth Group UNH, +2.65%, the biggest U.S. health insurer, reported a fall in quarterly profit, but its shares rose 2.6% in premarket trading as it maintained its 2020 profit outlook at a time when major companies have withdrawn forecasts due to the coronavirus pandemic.
Oil majors Exxon Mobil Corp XOM, -0.77% and Chevron CVX, -0.35% slipped about 3% as oil prices tumbled, pressured by reports suggesting persistent oversupply and collapsing global demand.
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