Wednesday October 17th

17-10-2018

Dow set for 100 point-plus decline as volatile trading continues, but Netflix will boost Nasdaq

U.S. stock-index futures pointed in different directions on Wednesday as volatile trading continues through the start of the latest earnings season. At around 8:25 a.m. ET, Dow Jones Industrial Average futures fell 131 points, indicating a drop 135.42 points at the open. S&P 500 futures also pointed to a lower open. Nasdaq 100 futures bucked the downward trend, pointing to a 0.3 percent gain after strong earnings from Netflix. Netflix shares were up 10 percent in the premarket after the streaming giant posted third-quarter earnings that easily beat expectations. The big beat was driven by stronger-than-expected subscriber growth in both the U.S. and overseas. J.P. Morgan said in a note the company is “back on track” following the release of its latest results. “While quarters can be lumpy, the bigger picture path is consistent, & we continue to believe there is significant growth potential ahead,” J.P. Morgan said. CSX and Cree also reported better-than-expected earnings Tuesday after the close, while M&T Bank and U.S. Bancorp’s results topped estimates Wednesday before the bell.  However, IBM reported mixed quarterly results, with earnings topping estimates and revenue missing. The results sent the company’s stock down by more than 5 percent. Overall, the earnings season is off to a good start. Of the S&P 500 companies that have reported thus far, 89.8 percent have topped analyst expectations, according to FactSet. Wednesday’s moves come a day after the major indexes posted their best day since March, boosted by strong earnings. On Tuesday, the Dow surged more than 500 points as Goldman Sachs, Johnson & Johnson, and UnitedHealth jumped. Tuesday’s jump helped Wall Street recover some of the steep losses from last week. On the data front, housing starts fell 5.3 percent last month, more than expected. At 2 p.m ET, the Federal Open Market Committee will release the minutes of its meeting held in late September. Stocks in Asia were broadly higher on Wednesday following a bounce on Wall Street overnight on strong U.S. earnings. The mainland Chinese markets saw a bounce in the afternoon to close higher, with the Shanghai composite advancing by 0.6 percent at around 2,561.61 while the Shenzhen composite gained 0.81 percent at approximately 1,266.55. In Japan, the Nikkei 225 advanced by 1.29 percent to close at 22,841.12, while the Topix index gained 1.54 percent to end the trading day at 1,713.87, with most sectors still trending up. In South Korea, the Kospi advanced by 1.04 percent to close at 2,167.51. Hong Kong’s stock market is closed for a public holiday. Oil prices dipped on Wednesday after rising for three consecutive days, surrendering earlier gains on industry data showing a surprise decline in U.S. crude inventories. Brent crude was down 31 cents at $81.10 a barrel by 8:20 a.m. ET (1220 GMT), after gaining $1.15 in the previous three sessions. The global benchmark, which hit a two-week low last week as equity markets dropped, is trading around $5 below a four-year high of $86.74 reached on Oct. 3. U.S. light crude oil fell 37 cents at $71.55. Gold prices edged lower early Wednesday as equities gained and the dollar firmed amid waning risk-averse sentiment, with the market awaiting minutes from the U.S. Federal Reserve’s latest policy meeting for fresh clues on the pace of interest rate hikes. Spot gold was down 0.2 percent to $1,221.56 per ounce at 0438 GMT, but still near a 2-1/2-month high of $1,233.26 per ounce hit on Monday. U.S. gold futures were down 0.5 percent at $1,225.2 an ounce.