U.S. Futures Suggest Higher Open

U.S. stocks futures are suggesting a higher open in pre-market trading for Monday, May 2. The Dow Futures are up 21.00 points to 17,714.0. The S&P 500 Futures are up 2.50 points to 2,061.5. The Nasdaq Futures are higher at 4,334.0 for a gain of 2.50 points. The Russell Futures are showing a gain of 2.70 points to 1,130.3.

U.S. market indexes closed broadly lower on Friday as the market overcorrected to the downside after affects from the Bank of Japan’s no change in rates continued to remain a factor and the market also saw lower expected GDP growth and economic strengthening in the country. Energy sector stocks were also a key factor as leading large-cap companies Exxon (XOM) and Chevron (CVX) reported continued losses in earnings. On Friday the Dow Jones Industrial Average closed at 17,773.64 for a loss of 57.12 points or -0.32 percent. The Standard & Poor’s 500 was also lower, closing at 2,065.30 for a loss of 10.51 points or -0.51 percent. For the week both indexes finished lower. The Dow Jones Industrial Average finished down -1.26 percent, and the S&P 500 was down -1.25 percent.

After potential overselling on Friday, futures are trading higher and the major factors for Monday and the week ahead continue to be broadly lower earnings, changes in the outlook for Japan’s economy, uncertainty around the Fed’s next move and potentially weakening economic growth in the U.S. U.S. economic factors will be under close watch this week after the Bureau of Economic Analysis reported first quarter GDP growth of 0.5%.

In the Dow Jones Industrial Average, Disney (DIS), Pfizer (PFE) and Merck (MRK) will be reporting earnings this week with no major earnings reports in the Dow Jones Industrial Average scheduled for Monday. Meanwhile top pre-market movers for Monday include Monster (MWW), Amazon (AMZN) and Expedia (EXPE). On Friday, Amazon shares traded substantially higher after the company reported earnings Thursday evening. Amazon’s stock was up 57.59 points to 659.59 for a gain of 9.57 percent. The company reported earnings per share of $1.07 beating analysts’ estimates by $0.49. Revenue for the first quarter was $29.13 billion, beating analysts’ estimates by $1.15 billion and gaining $28.2 from the comparable quarter. The company also raised its guidance for the second quarter with expected revenue of $28 billion to $30.5 billion. Second quarter operating income is now expected to be $375 million to $975 million in comparison to $465 million for the second quarter of 2015.

AMZN

Source: Google. Friday’s stock price trading for Amazon.

While the broader market fell Friday, large-cap stocks in the Dow Jones Industrial Average showed resilience. Home Depot (HD) and Travelers (TRV) finished higher for the day. Meanwhile, Wal-Mart (WMT), Cisco (CSCO) and Intel (INTC) led the Dow Jones Industrial Average lower. Utilities and consumer discretionary were Friday’s leading stock sectors. Utilities were up 0.60 percent and consumer discretionary gained 0.51 percent. Healthcare and technology reported the market’s greatest losses Friday. Healthcare was down 1.56 percent and technology 0.87 percent.

The U.S. technology sector moved broadly lower Friday despite the strong gains from Amazon. The Nasdaq Composite was down -0.62 percent to close at 4,775.36 for a loss of -29.93 points. Technology sector earnings overall continued to show a weaker outlook as Apple’s earnings created greater market anxiety over slowing sales in mobile and personal computers. Nasdaq Futures are showing slight gains expected in the technology sector for Monday.

In global market trading, Asian stocks are trading lower and Europe indexes are mixed. China’s Shanghai Composite is at 2,938.45 for a loss of -7.14 points or -0.24 percent. Hong Kong’s Hang Seng index closed at 21,067.05 for a loss of -320.98 points or -1.50 percent. Japan’s Nikkei is at 16,147.38 for a loss of -518.67 points or -3.11 percent. In Europe, the FTSE is at 6,241.89 for a loss of -80.51 points or -1.27 percent. Germany’s DAX is at 10,130.00 for a gain of 91.03 points or 0.91 percent. France’s CAC 40 is at 4,450.71 for a gain of 21.75 points or 0.49 percent.

Julie Young

julie@spfutures.org

Julie Young is a senior Market Reporter and Analyst

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