U.S. stock-index futures pointed lower Friday, with investors waving off strong quarterly results from technology heavyweights to focus on the uncertain outlook amid a surge in COVID-19 cases in the U.S. and Europe.
On the last trading of the month, investors also face the prospect of the U.S. elections next Tuesday and no certainty about the timing of any further aid for businesses and consumers from Congress.
What are major indexes doing?
Futures on the Dow Jones Industrial Average
were down 145 points, or 0.6%, at 26,412, while S&P 500 futures
declined 19.30 points, or 0.6%, to 3,283. Nasdaq-100 futures
dropped 113 points, or 1%, to 11,229.75. Futures were off earlier lows, which had seen the Dow contract drop by more than 500 points.
on Thursday rose 139.16 points, or 0.5%, to close at 26,659.11, while the S&P 500
added 39.08 points, or 1.2%, to finish at 3,310.11. The Nasdaq Composite
gained 180.72 points, or 1.6%, finishing at 11,185.59.
The Dow on Thursday snapped a four-day losing streak, but remained down 5.9% for the week, which would be its largest weekly decline since March. The S&P 500, which broke a three-day streak of declines, was down 4.5% through Thursday, enough for its biggest weekly decline since June.
What’s driving the market?
The so-called FAANG stocks, which have been key drivers of the stock market’s rally off the lows seen in March, were in focus after Facebook Inc., Apple Inc., Amazon.com Inc. and Google parent Alphabet Inc. all delivered upbeat results, including record-breaking sales, following Thursday’s closing bell. Netflix Inc. also got in on the act, announcing an increase in prices for U.S. customers.
While earnings and revenues for the tech juggernauts largely crushed expectations, guidance for the future was far more cautious, reflecting concerns about the long-term effect of COVID-19 on demand, said Boris Schlossberg, managing director at BK Asset Management, in a note.
“The big tech names have been driving all the stock market gains since the summer on the idea their performance was impervious too — or even helped by — the pandemic,” said Jasper Lawler, head of research at London Capital Group, in emailed comments. “The earnings beat expectations but by carrying the weight of the market, tech stocks were priced to perfection.”
Stocks have been dogged by worries over the economic outlook as European countries put in place tougher restrictions on activity in response to a surge in COVID-19 cases, while the U.S. saw the number of new daily infections hit records. The U.S. on Thursday saw more than 88,500 new cases on Thursday, a new daily high, The Wall Street Journal reported.
The U.S. economic calendar features September readings on personal income and consumer spending at 8:30 a.m. Eastern. Economists polled by MarketWatch expect income to show a 0.5% rise after a 2.7% drop in August, while spending is seen rising 1.1% after the previous month’s 1% increase. Core inflation is expected to show a 0.2% rise after a 0.3% jump in August.
Also at 8:30 a.m. ET, the employment cost index is expected to show a 0.5% rise for the third quarter, matching the increase seen in the previous quarter.
A final reading on an October consumer sentiment index at 10 a.m. ET is expected to come in at 81.2 versus a September reading of 80.4.
Which stocks are in focus
shares fell 1.4% in premarket trade after reporting record quarterly sales Thursday, which saw it already reach a record profit total in 2020 thanks to increased spending during the pandemic.
shares were down 3.8% after delivering record September quarter revenue to wrap up its fiscal year, but declining to provide a forecast.
Shares of Facebook Inc.
were off 2.7%. The social-media juggernaut topped forecasts for third quarter profit and revenue, despite a torrent of criticism that included a monthlong ad boycott in July.
Shares of Google parent Alphabet Inc.
bucked the downbeat trend, rising more than 6% in premarket action after the internet-search giant reported a return to rising ad sales and topped forecasts when it released its third-quarter results after Thursday’s close.
Shares of Netflix Inc.
were down 0.9% after the streaming giant said late Thursday it would increase prices in the U.S. following a surge in new subscriptions in the first few months of the COVID-19 pandemic
shares were in focus after the energy giant on Friday said it swung to a net loss in the third quarter, but delivered earnings that beat expectations while revenues fell shy of expectations.
MarketWatch has launched ETF Wrap, a weekly newsletter that brings you everything you need to know about the exchange-traded sector: new fund debuts, how to use ETFs to express an investing idea, regulations and industry changes, inflows and performance, and more. Sign up at this link to receive it right in your inbox every Thursday.