MW: U.S. stock futures slip in face of earnings deluge
U.S. stock futures were trading slightly lower on Tuesday as investors digested a slew of earnings results and better-than-expected housing-starts data.
Investors will also focus on the Federal Reserve Chairwoman Janet Yellen’s speech later on Tuesday.
Futures for the Dow Jones Industrial Average YMZ5, -0.12% dropped 14 points, or 0.1%, to 17,104, while S&P 500 index futures ESZ5, -0.22% lost 3.65 points, or 0.2%, to trade at 2,023.75. Nasdaq 100 index futures NQZ5, -0.15% fell 4 points, or 0.1% to 4,4450.75.
“The U.S. futures markets have followed their European equivalents lower,” said David Madden, market analyst at IG, in a note.
“The reporting season in the U.S. has got off to a poor start, and to make matters worse the strong economic data adds weight to the argument that the Fed will hike rates this year,” he said.
The indicated losses on Tuesday come on the back of a choppy session on Monday, when the main benchmarks closed marginally higher. The S&P 500 index SPX, +0.03% was weighed by the energy sector dropping 1.9%, dragged lower by a slide in oil prices. Crude oil CLX5, +0.76% inched higher on Tuesday.
Earnings deluge: The third-quarter earnings season was set to enter its peak on Tuesday, with 20 companies slated to report, according to S&P Capital IQ. Highlights ahead of the bell include motorcycle retailer Harley-Davidson Inc. HOG, -8.06% whose stock slumped 7.4% after a profit miss.
Lockheed Martin Corp. LMT, +0.41% shares fell 2.4% after the defense contractor said third-quarter profit slipped amid military force reductions and lower demand for certain government support service programs.
Meanwhile, insurer Travelers Cos. Inc. TRV, +0.40% posted third-quarter profit and revenue that topped analysts’ expectations, sending the shares 3.1% higher premarket.
United Technologies Corp. UTX, -1.02% rose 1.1% ahead of the bell after reporting third-quarter profit ahead of forecasts.
Verizon Communications Inc. VZ, +0.69% posted third-quarter earnings ahead of forecast. Shares rose 1.4%.
VZ, +0.69% And after the market closes, fast food chain Chipotle Mexican Grill Inc. CMG, +0.46% Yahoo! Inc. YHOO, -0.24% and Discover Financial Services DFS, -1.27% are on the earnings docket.
Data: Construction started on new U.S. homes rose 6.5% to an annual rate of 1.21 million in September, according to government data released Tuesday.
“Construction data out of the U.S. could provide further clues as to whether the Federal Reserve will manage to squeeze in that much talked about rate hike right before Christmas,” said Tony Cross, market analyst at Trustnet Direct, in a note.
On Monday at midnight, the Fed formally entered its blackout period ahead of its Oct. 27-28 meeting, which means policy makers won’t make any comments on interest rates until after the next rate decision.
However, they can still discuss other matters of the economy. In that regard, New York Fed President William Dudley and Governor Jerome Powell will give welcoming remarks at a regulatory conference on the bond market at 9 a.m. Eastern.
Fed Chairwoman Janet Yellen gives “brief welcoming remarks” at the Labor Department hall of honor induction ceremony at 11 a.m. Eastern.
Other markets: European markets were mired in losses, after Shanghai rallied in a mixed session in Asia.
Metals prices were mostly lower, while the dollar lost ground against most major currencies.
