Stock Futures Sharply Lower as Tech Selloff Resumes
New York (June 15) Stock futures pointed to steep declines for Wall Street on Thursday, June 15, as a sharp selloff in tech names resumed.
S&P 500 futures were down 0.6%, Dow Jones Industrial Average futures fell 0.4%, and Nasdaq futures tumbled 1%.
Tech stocks will likely take another hit on Thursday as the selloff that ravaged the sector earlier in the week picked up speed again. The FAANG stocks -- Facebook Inc. (FB) , Apple Inc. (AAPL) , Amazon Inc. (AMZN) , Netflix Inc. (NFLX) and Alphabet Inc. (GOOGL) (formerly Google) -- were lower in premarket trading, adding to sharp losses seen in the final hours of trading Wednesday, June 14.
Those stocks had accounted for two-fifths of the S&P 500's gains this year, said John Stoltzfus, chief investment strategist at Oppenheimer, during the initial selloff on Monday. That's "reason enough we'd think for some investors to take a little money off the table in the tech space," he wrote in a note.
Facebook, Apple, Amazon, Netflix and Alphabet were each at least 1% lower in premarket trading on Thursday.
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In the U.S. on Thursday, the economic calendar includes weekly jobless claims, the Philadelphia Fed Business Outlook Survey and the Empire State Manufacturing Survey for June, and import and export prices for May at 8:30 a.m. EST, industrial production for May at 9:15 a.m., and the housing market index for June at 10 a.m.
On Wednesday, June 14, the Federal Open Market Committee, the monetary policy arm of the U.S. central bank, raised interest rates and detailed plans to unwind its $4.5 trillion balance sheet. Weeks of hawkish Fed commentary had cushioned markets for a June rate hike as members pointed to a healthy labor market and generally positive economic trends.
The Fed did concede that recent inflation had shown signs of weakness, particularly on a 12-month basis. Inflation "is expected to remain somewhat below 2% in the near term but to stabilize around the Committee's 2% objective over the medium term," members said in a statement. The Committee is "monitoring inflation developments closely." Fed Chair Janet Yellen said in a press conference that "one-off" price decreases were responsible for soft inflation.
Most members also telegraphed one more rate hike this year and an average three in 2018. Yellen did say that the central bank was not on a preset course, though said that the likely rate of economic growth would warrant further interest rate hikes. Yellen gave projections of median short-term rates as 1.4% at end of this year; 2.1% at end of 2018; and 2.9% at end of 2019.
The Bank of England held its key interest rate at 0.25%, as expected, at a meeting on Thursday. That decision was a majority, though a narrower one than previous meetings -- five of the eight votes were cast in favor of holding rates unchanged. The central bank also held its asset purchase program unchanged at 435 billion euros.
Reports indicated special counsel Robert Mueller has begun interviewing top government officials as part of an investigation into whether Donald Trump tried to obstruct justice regarding Russia's role in the 2016 election.
"Trump had received private assurances from then-FBI Director James B. Comey starting in January that he was not personally under investigation," said a story in The Washington Post. "Officials say that changed shortly after Comey's firing."
Basing its information on several unnamed sources, the newspaper said Mueller's obstruction-of-justice investigation of Trump began within days of Comey's dismissal on May 9. "Preliminary interviews scheduled with intelligence officials indicate his team is actively pursuing potential witnesses inside and outside the government," the Post reported.
Bob Evans Farms Inc. (BOBE) rose more than 3% in premarket trading after exceeding analysts' estimates for earnings in its recent quarter. Adjusted earnings of 61 cents a share soared past consensus of 48 cents. Sales came in short, though. Revenue of $99.9 million missed forecasts of $105 million. Guidance for fiscal 2018 also fell short of estimates.
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Source: TheStreet
