U.S. Stock Futures Slip as Tech Rally Fades
September 10 2020 - 6:52AM
Dow Jones News
By Caitlin Ostroff
U.S. stock futures edged lower Thursday as a rebound in
technology shares paused and investors braced for the possibility
of more market volatility.
Futures tied to the S&P 500 slid 0.5% and those linked to
the tech-heavy Nasdaq fell 0.2%, indicating markets were set to
open lower later Thursday. The pan-continental Stoxx Europe 600
declined 0.4%.
In off-hours trading, shares in GameStop fell 9.4% after the
retailer reported fiscal second-quarter results that missed Wall
Street estimates. Shares in AstraZeneca rose 1.3% premarket after
the company's chief executive said a Covid-19 vaccine it is
developing with the University of Oxford could still be ready by
the end of the year.
Later Thursday, investors will be watching the European Central
Bank's policy decision and the release of U.S. weekly jobless
claims.
Volatility in big technology stocks such as Apple, Amazon.com
and Microsoft has dominated markets in recent days. Tech shares
rose broadly Wednesday following a three-session selloff that
pushed the Nasdaq Composite Index into correction territory.
Despite recent moves lower, the Nasdaq has gained more than 20%
this year.
The recent slide in tech stocks has raised worries that the
market, which had risen so sharply over the summer, could be set
for a more turbulent period. In a sign of nervousness, the Cboe
Volatility Index, known as the VIX and seen as Wall Street's fear
gauge, has risen lately and was up 2.7% to 29.60 on Thursday.
"We could see volatility continue just because there are so many
factors if you think about the lack of progress on fiscal stimulus
in the U.S. and the [Covid-19] case counts," said Wei Li, head of
iShares EMEA investment strategy at BlackRock. "It's just hard to
think we can put this to bed."
Congress remains deadlocked over a fresh stimulus package. On
Wednesday, Senate Republicans said they would support a scaled-back
$300 billion version of their earlier $1 trillion stimulus plan,
including jobless aid, liability protections for businesses and
school funding. Democrats oppose the bill, and it isn't expected to
clear its first procedural hurdle in the Senate on Thursday.
In European trading, shares in British Airways parent
International Consolidated Airlines Group fell 1.8% after it
outlined the terms of a planned capital increase to strengthen its
balance sheet and reduce debt.
Trading in Asia was mixed, with the Shanghai Composite falling
0.6% while Korea's Kospi and Japan's Nikkei 225 each gained
0.9%.
Tensions between Washington and Beijing continued to loom over
markets. More than 70% of U.S. companies polled by the American
Chamber of Commerce in Shanghai expect geopolitical turbulence to
create operational difficulties for them over the next three to
five years, up sharply from roughly half that said the same thing
last year.
The euro gained 0.3% against the dollar ahead of the ECB's
interest-rate decision. Investors will be listening for indications
on how a recently stronger euro will affect monetary policy.
In the bond market, the yield on the 10-year Treasury ticked
lower to 0.697%, from 0.702% on Wednesday.
In commodities, Brent crude oil fell 1% to $40.38 a barrel and
WTI futures slid 1.3% to $37.54 a barrel. American Petroleum
Institute data released late Wednesday showed a surprise build in
U.S. crude inventories.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
September 10, 2020 07:37 ET (11:37 GMT)
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