U.S. stock futures were trading lower for a third straight day as geopolitical tensions between the U.S. and North Korea dampened investor’s appetite for risk and overshadowed upbeat corporate earnings from Macy’s ( M ), 21st Century Fox ( FOXA ) and Kohl’s ( KSS ).
Unnerved by Pyongyang’s latest threat to fire ballistic missiles at a U.S. territory by the middle of August, global investors sold equity assets and rotated into safe-havens like the U.S. 10-year Treasury note, gold, the Japanese yen and Swiss franc. The rotation is being amplified by profit-taking in most sectors with the notable exception of defense stocks with shares of Lockheed Martin ( LMT ), Ratheon ( RTN ) and Northrup Grumman (NOC) set to open at record highs.
A contraction in producer prices — and its likely impact on Federal Reserve monetary policy — did little to dent the negative atmosphere on Wall Street. The producer price index contracted 0.1% in July, its largest decline in nearly a year, and below expectations for a modest gain of 0.1%. Excluding the volatile food and fuel component, the core-PPI was also down 0.1% vs +0.2% estimates.
Initial jobless close rose by a greater-than-expected 3,000 to 244,000 for the week ended Aug 5 following an upward revised 241,000 the week prior. Continuing claims dropped to 1.95 million from 1.96 million.
Overseas markets were also measurably lower as a result of events on the Korean peninsula as well as warnings from large asset management funds to mitigate risk in equities and junk bonds and park cash in government securities and commodities. Hong Kong’s Hang Seng index fell by more than 1%, taking European bourses sharply lower in sympathy.
-Dow Jones Industrial down 0.22%
-S&P 500 futures down 0.38%
-Nasdaq 100 futures down 0.60%
Nikkei down 0.05%
Hang Seng down 1.13%
Shanghai Composite down 0.42%
FTSE-100 down 1.10%
DAX-30 down 0.74%
PRE-MARKET SECTOR WATCH
(-) Large cap tech: Lower
(-) Chip stocks: Lower
(-) Software stocks: Lower
(-) Hardware stocks: Lower
(-) Internet stocks: Lower
(-) Oil stocks: Lower
(-) Biotech stocks: Lower
(+/-) Drug stocks: Flat
(-) Financial stocks: Lower
(+/-) Retail stocks: Mixed
(+/-) Industrial stocks: Flat to Lower
(-) Airlines: Mixed
(-) Autos: Lower
(+) HDSN (+18.09%) Reported better-than-expected Q2 results. Selling Airgas-Refrigerants unit to Air Liquide
(+) GLPG (+15.28%) Announced top-line results for GLPG 1690 in Flora phase 2 trial
(+) PRGO (+11.24%) Beat Q2 results and raised FY17 guidance
(-) CBI (-19.72%) Reported an unexpected loss for Q2, intends to sell technology unit
(-) SYNC (-16.90%) Reported better-than-expected Q2 results but issued downbeat Q3 sales guidance and lowered its FY sales outlook below street estimates
(-) DDS (-13.21%) Q2 results missed Wall Street’s expectations
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