Dow futures edge back as Wall Street braces for busy earnings week

U.S. stocks on Monday pointed to a lower opening as investors braced for a barrage of quarterly results from corporations over the coming days. More than 480 companies are slated to report updates, including a number of prominent technology-related firms.

How are benchmarks performing?

Futures for the Dow Jones Industrial Average
were 45 points, or 0.2%, lower at 26,474, those for the S&P 500 index
receded 6.40 points, or 0.2%, at 3,207.50 while Nasdaq-100 futures
were 7.50 points, or less than 0.1%, higher at 10,630.

On Friday, the Dow
finished 2.3% higher, the S&P 500
booked a gain of 1.3%, and the Nasdaq Composite Index
lost 1.1%.

What’s driving the market?

Wall Street is set to kick off a busy week of corporate earnings, which could help to determine whether a so-called rotation from highflying technology stocks and into beaten-down cyclicals is sustainable, with coronavirus cases and deaths in the country continuing to reach records over the weekend.

North Carolina, Louisiana and Kentucky reported record infections of COVID-19 of 2,400, 3,119 and 979 respectively on Sunday, the Wall Street Journal reported, while Arizona registered a record high death tally of 147 deaths.

Meanwhile, Florida, the epicenter in the U.S., reported nearly seven-day average of 12,000 cases, surging by nearly a 30%, according to CNBC, citing data compiled by Johns Hopkins University.

The escalation of the deadly pandemic in the U.S. is diminishing hopes for a V-shaped, or quick and strong economic recovery from the pandemic, as the virus taxes the public-health system of some states and municipalities and forces the reinstallation of measures to limit a more severe outbreak.

Investors will be closely watching data from corporations including Microsoft
and Intel
among a parade of entities that will offer greater insight about the economic outlook as American corporations contend with the worst pandemic in more than 100 years.

Market participants also are watching developments around stimulus funds here and in the U.S., with the European Union leaders in Brussels negotiating an unprecedented €1.85 trillion ($2.1 trillion) budget and coronavirus recovery fund to tackle the crisis.

EU leaders were said to be close to a rescue package after four governments—Austria, Netherlands, Denmark and Sweden—known as the frugal four, appeared close to agreeing to one portion of the recovery funds that had stalled talks over the weekend, according to Bloomberg News, citing officials familiar with talks.

“Some progress has been made, which is encouraging, and negotiations are expected to carry on this afternoon,” said David Madden, market analyst at CMC Markets UK, in a research note. “The EU have a track record of a lot of in-house haggling, but in the end a deal is usually struck,” he wrote.

Meanwhile, returning Washington lawmakers will aim to draft an additional rescue package of its own, with a group, including Sen. Mitch McConnell and Treasury Secretary Steven Mnuchin set to meet in the White House to discuss a $1 trillion package, which is lower than the $3.5 trillion proposed by Senate Democrats. House Speaker Nancy Pelosi, D-Calif., already pushed through a more sweeping $3 trillion relief bill to bolster virus testing, keep aid flowing and set new health and workplace standards for reopening schools, shops and workplaces.

Which stocks are in focus?
  • Shares of Noble Energy Inc.
    surged in premarket trading Monday, after Chevron Corp.
    confirmed an all-stock deal to buy the oil-and-gas producer for about $5 billion. Including Noble’s debt, the deal would be valued at about $13 billion. The deal was earlier reported by the Wall Street Journal.

  • Briggs & Stratton Corp.
    said Monday it has filed for chapter 11 bankruptcy and reached an agreement to sell most of its assets to KPS Capital Partners.

  • Shares of Halliburton Co.
    sank in premarket trading Monday, after the oil-services company reported a surprise second-quarter adjusted profit but revenue that fell short of expectations.

  • Cal-Maine Foods Inc.
    said Monday it had net income of $60.5 million, or $1.24 a share, in its fiscal fourth quarter to May 30, after a loss of $19.8 million, or 41 cents a share, in the year-earlier period.

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