Modupe Gbadeyanka
By Investors Hub
There are strong indications that disappointing earnings news may weigh on the US stock markets because the major US index futures are already pointing to a lower opening on Thursday following the lacklustre performance seen over the past few sessions.
Shares of department store operator Macy’s (M) and Snapchat parent Snap (SNAP) are under pressure in pre-market trading after reporting weaker than expected quarterly results.
Concerns about the outlook for interest rates may also generate some negative sentiment following the release of a report from the Labor Department showing a bigger than expected increase in producer prices in the month of April.
After an initial move to the downside, stocks showed a lack of direction over the course of the trading session on Wednesday. The major averages spent much of the day bouncing back and forth across the unchanged line.
The major averages eventually ended the session mixed. While the Dow edged down 32.67 points or 0.2 percent to 20,943.11, the Nasdaq inched up 8.56 points or 0.1 percent to 6,129.14 and the S&P 500 crept up 2.71 points or 0.1 percent to 2,399.63.
The choppy trading on Wall Street came amid political uncertainty on the heels of President Donald Trump’s abrupt dismissal of FBI Director James Comey.
In a letter to Comey, Trump said it is essential to find new leadership that restores public trust and confidence in the FBI’s vital law enforcement mission.
A statement from the White House said Trump acted based on the clear recommendations of both Deputy Attorney General Rod Rosenstein and Attorney General Jeff Sessions.
The move has generated some criticism, however, as it comes as Comey was leading an investigation of potential ties between Russia and Trump’s presidential campaign.
Comey’s firing also raised concerns about Trump’s ability to move forward on policy issues such as tax reform and deregulation.
Traders also seemed somewhat reluctant to make significant moves ahead of the release of key reports on retail sales and producer and consumer prices in the coming days.
On the economic front, the Labor Department released a report showing that import prices rose by more than expected in the month of April, with the increase partly reflecting a rebound in prices for fuel imports.
The Labor Department said import prices climbed by 0.5 percent in April after a revised 0.1 percent uptick in March. Economists had expected import prices to rise by 0.2 percent.
The report also said export prices rose by 0.2 percent in April after inching up by a revised 0.1 percent in March. Export prices had been expected to creep up by 0.1 percent.
Among individual stocks, shares of Yelp (YELP) moved sharply lower after the online review company reported a narrower than expected first quarter loss but provided disappointing revenue guidance.
Magazine publisher Time (TIME) also came under pressure after reporting a wider than expected first quarter loss on revenues that came in below estimates.
Meanwhile, shares of Nvidia (NVDA) showed a strong move to the upside after the graphics chip maker reported first quarter results that exceeded expectations.
Most of the major sectors ended the day showing only modest moves, although considerable strength was visible among energy stocks.
The strength in the energy sector came amid a jump by the price of crude oil after a report showed a steep weekly decline in crude oil inventories.
Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index surged up by 2.6 percent, the Philadelphia Oil Service Index advanced by 1.6 percent and the NYSE Arca Oil Index climbed by 1.3 percent.
Significant strength was also visible among gold stocks, as reflected by the 2 percent jump by the NYSE Arca Gold Bugs Index.
Semiconductor and steel stocks also saw notable strength on the day, while some weakness was visible among trucking stocks.
