ND: U.S. Stock Futures Point to Fourth Session of Losses
By Saumya Vaishampayan
U.S. stock futures fell Thursday, as economic worries and increased tensions in the Middle East pushed the market lower for a fourth straight day.
S&P 500 futures declined 16 points, or 0.8%, to 2038. E-mini Dow futures lost 136 points, or 0.8%, to 17515, and e- mini Nasdaq-100 futures dropped 49 points, or 1.1%, to 4274.
Investors said escalating conflict in the Middle East added to Thursday's negative tone. Saudi Arabia and other Gulf states launched airstrikes against Houthi rebels in Yemen. Oil prices continued to climb amid the unrest in Yemen, a small oil producer which lies on an important transit route for oil tankers. A potential closing of that route could disrupt the flow of oil, pushing prices higher. Crude-oil futures rose 4.2% to $51.28 a barrel.
European stocks fell for the second day in a row. France's CAC 40 slipped 1.6% and Germany's DAX lost 1.7%.
U.S. stocks fell sharply on Wednesday, led by declines in biotechnology and other highflying stocks. The Dow dropped 1.6% to 17718.54 and the S&P 500 slipped 1.5% to 2061.05. The Nasdaq Composite, which has a heavy weighting in technology and biotechnology stocks, posted its biggest one-day decline since April 2014.
Stocks have fallen every day this week so far, with the Dow pulling back 2.3% through Wednesday's close. The S&P has slipped 2.2% and the Nasdaq has declined 3% in the same period. Losses have come amid fresh concerns about the pace of U.S. economic growth in the first quarter, including Wednesday's downbeat durable goods orders report, and prospects for first-quarter earnings.
"It'll be a drag on companies' earnings if growth truly isn't where we thought it was during the first quarter," said Chris Gaffney, president of EverBank World Markets. That's adding to an already tepid outlook for first-quarter profit, as the strong dollar likely weighed on multinationals' overseas results.
While oil prices have rallied in recent sessions, they remain down more than 50% from last June.
"We've had lower gasoline prices, but what we've seen from retail sales numbers is that consumers aren't spending those savings from the gas pump," said Mr. Gaffney. "That isn't going to bolster earnings as we thought it was going to," he added.
Still, Mr. Gaffney is positive on stocks for the year, as a likely slow pace of rate increases from the Federal Reserve will ensure that the overall monetary policy remains accommodative for a while longer. "Once consumers start spending, it's going to be a good year for stocks," he added.
The dollar weakened against several other currencies. The euro ticked up to $1.099 from 1.0971 on Wednesday.
Gold futures added 0.9% to $1207.80 an ounce. Treasury prices rose slightly, pushing the 10-year yield down to 1.917% from 1.920% Wednesday.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
