US stocks set to break winning run after Iran nuclear deal
New York (July 14) Stock futures pulled back Tuesday, as energy shares headed south in premarket trade after an Iranian nuclear deal stoked fears of oil-market oversupply.
Futures for the Dow Jones Industrial Average YMU5, -0.02% slipped 17 points, or 0.1%, to 17,883, while those for the S&P 500 index ESU5, -0.02% lost 1.65 points, or 0.1%, to 2,092.75. Futures for the Nasdaq 100 index NQU5, +0.07% rose 1.25 points to 4,489.25.
The small losses come after an agreement on a bailout package for Greece sent markets rallying in the U.S. and Europe on Monday. If the losses hold throughout the trading day, they would break a three-session win streak.
Oil selloff: Stocks came under pressure Tuesday morning as crude oil prices headed for their worst settlement price since mid-April. The declines came after six world powers reached a deal with Iran that sees the country accept limits on its nuclear activities in exchange for the removal of economic sanctions. Analysts say Iran could then quickly step up its oil exports, potentially adding more pressure on oil prices.
“An Iran deal means it can export from its stockpile of oil into the already saturated market and is likely to increase production another 5,000 barrels a day,” said Rocky Muddar, trader at TradeNext, in a note. “But this is likely to take up 12 months while Iran reopens oil fields.”
The August contract for crude futures CLQ5, -1.19% dropped 2% to $51.15 a barrel, building on a 1% slide from Monday.
The decline weighed on U.S. traded oil-related securities, with the 3x Long Crude ETN UWTI, -4.17% down 6% premarket and the iPath Goldman Sachs Crude Oil Total Return Index ETN OIL, -1.04% off 1.8%.
Among individual stocks, Exxon Mobil Corp. XOM, +0.24% and Halliburton Co. HAL, +1.31% each shaved off 0.4% ahead of the bell, while ConocoPhillips COP, -0.34% dropped 0.8%.
Movers & shakers: Shares of Micron Technology Inc. MU, +13.29% surged 12% ahead of the bell after a report late Monday that China’s Tsinghua Unigroup Ltd. has submitted a bid to buy out the U.S. memory-chip maker for $23 billion.
Starbucks Corp. SBUX, +2.07% added 0.6% in thin premarket trade after the coffee chain struck a deal to push into sub-Saharan Africa next year.
Shares in Digital Realty Trust Inc. DLR, -1.03% may be active after the data-center and colocation company said it has made a $1.9 billion deal to buy Telx from Berkshire Partners and Abry Partners.
Earnings: The reporting season for major U.S. banks kicks off on Tuesday, with J.P. Morgan Chase & Co. JPM, +1.55% and Wells Fargo & Co. WFC, +1.18% releasing earnings before the bell.
Source: MarketWatch
