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U.S. stock-index futures fell Friday as investors gauged a mixed round of Chinese data and looked ahead to what’s expected to be a dismal round of figures on U.S. retail sales.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YM00, -1.07% were down 183 points, or 0.8%, at 23,351, while S&P 500 futures ES00, -1.07% dropped 21.65 points, or 0.8%, to 2,825.25. Nasdaq-100 futures NQ00, -1.28% lost 63.50 points, or 0.7%, to 9,016.
The Dow Jones Industrial Average DJIA, +1.62% on Thursday erased an early loss to stage an 835-point U-turn to finish with a gain of 377.37 points, or 1.6%, at 23,625.34. The S&P 500 SPX, +1.15% rose 32.5 points, or 1.2%, to close at 2,852.50, while the Nasdaq COMP, +0.90% advanced 80.55 points, or 0.9%, ending at 8,943.72.
Stocks remained on track for weekly declines, with the Dow off 2.9% for the week, the S&P 500 down 2.6% and the Nasdaq 2% lower.
What’s driving the market?
Stock-market bulls contend there’s room to further trim those weekly declines after the Thursday’s rebound, which saw equities initially stumble after data showing 2.6 million Americans applied for first-time jobless benefits last week.
Investors heard Federal Reserve Chairman Jerome Powell on Wednesday say more fiscal stimulus will likely be needed “and then saw nearly 3 million more U.S. jobless claims and put two and two together,” said Jasper Lawler, head of research at London Capital Group, in a note. “The bet, for now, seems to be that more fiscal and monetary stimulus is in the offing and its being executed by buying shares and precious metals.”
Data out of China showed factory output rose 3.9% in April from a year earlier, picking up after a 1.1% year-over-year contraction in March as the country continued to emerge from lockdowns imposed to combat the coronavirus epidemic. Consumer spending, however, contracted 7.5% year-over-year after a 15.8% decline in March.
“China is widely seen as the bellwether for navigating a post-lockdown world. Despite its supply-side forces faring better at present compared to demand-side indicators, it’s evident that China is only managing to tiptoe out of the lockdown gates as opposed to racing out of the blocks, even if the data does point to signs of recovery,” said Han Tan, market analyst at FXTM, in a note.
Overall. data out of China and the U.S. should put to rest the idea of a V-shaped recovery in the global economy, the analyst said.
U.S.-China tensions were also on the radar with reports that the Commerce Department was moving to block shipments of semiconductors to China’s Huawei Technologies. The Commerce Department said it was amending an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology,” the report said.
The U.S. economic calendar features April retail sales figures at 8:30 a.m. Eastern, which are expected to show a fall of 12.5%. The figure excluding autos is expected to fall 9%, according to a MarketWatch survey of economists.
Other data on tap include the New York Federal Reserve Bank’s May Empire State Index at 8:30 a.m., while the Federal Reserve is due to release April industrial production and capacity utilization figures at 9:15 a.m. Eastern. Industrial production is forecast to slump 12.5%, while capacity utilization is expected to fall to 63.2% from 72.7% in March.
March job openings figures and a preliminary May consumer sentiment index reading are set for 10 a.m. Eastern.
Which companies are in focus?
- Shares of Applied Materials Inc. AMAT, +5.71% were up 0.1% in premarket trade, after the chip maker reported mixed second-quarter results late Thursday.
- Nike Inc. NKE, +0.61% shares were off 0.5% in premarket action after the athletic-wear that strong online sales were picking up the slack for sluggish store sales.
- Shares of department-store retailer J.C. Penney Co. Inc. JCP, -12.52% fell 15% ahead of the bell following news reports Thursday night the company was set to file for bankruptcy protection in coming days.
