Futures lower as tech stocks take a beating



Fri, 28 Jul 2017 - 12:29 GMT


Fri, 28 Jul 2017 - 12:29 GMT

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 19, 2017.
Brendan McDermid

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 19, 2017. Brendan McDermid

U.S. - 28 July 2017: U.S. stock index futures were lower on Friday as Amazon's profit miss took a toll on technology shares.

* Amazon's (AMZN.O) shares were down 2.96 percent in premarket trading after it reported a 77 percent drop in profit as its rapid and costly expansion into new shopping categories and countries showed no sign of slowing.

* The fall weighed on the tech index, which has been the best performing sector this year, leading the S&P 500's 10.6 percent run in 2017.

* Facebook (FB.O), Google parent Alphabet (GOOGL.O) and Netflix (NFLX.O), part of the high-flying "FANG" stocks, were also lower.

* The Dow Jones Transport Average .DJT, often seen as a gauge of the economy's health, closed down 3.1 percent on Thursday, dragged lower by a worrisome outlook from package delivery company United Parcel Service (UPS.N).

* Still, the Dow industrials posted a record closing high, helped by strong quarterly earnings.

* The second-quarter earnings of the S&P 500 companies are expected to have risen 10.7 percent, compared with an 8 percent increase expected at the start of the month, according to Thomson Reuters I/B/E/S.

* Risk sentiment also took a hit following the failure of the Republicans to repeal Obamacare in a tight Senate vote overnight.

* Investors are worried about the ability of President Donald Trump to legislate his pro-growth agenda of tax reform and higher spending on infrastructure.

* Investors will be keeping an eye on the U.S Commerce Department's advance estimate of second-quarter gross domestic product, which is likely to have grown 2.6 percent, compared with a 1.4 percent rise in the previous quarter. The data is expected at 8:30 a.m. ET (1230 GMT).

* Advanced core PCE prices for the second quarter are forecast to rise 0.8 percent from a 2.0 percent rise in the first quarter.

* Starbucks (SBUX.O) fell 5.7 percent after the world's biggest coffee chain reported a fall in net income.

* Merck (MRK.N) was up 1 percent after reporting a jump in quarterly profit.

* Chinese internet search engine provider Baidu (BIDU.O) rose 4.3 percent as quarterly profit jumped.

Futures snapshot at 7:03 a.m. ET:

* Dow e-minis 1YMc1 were down 26 points, or 0.12 percent, with 21,082 contracts changing hands.

* S&P 500 e-minis ESc1 were down 7.75 points, or 0.31 percent, with 153,177 contracts traded.

* Nasdaq 100 e-minis NQc1 were down 46.5 points, or 0.79 percent, on volume of 37,100 contracts.



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