Futures point to rebound after technology-led selloff
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[November 13, 2018]
By Sruthi Shankar
(Reuters) - U.S. stock futures rose on
Tuesday, as strong earnings from Home Depot Inc <HD.N> and a rebound in
technology stocks put Wall Street on track to end a three-day run of
Shares of Home Depot rose 3.5 percent in premarket trading after the
No.1 home improvement chain reported a better-than-expected rise in
sales at established U.S. stores.
Rival Lowe's Cos Inc <LOW.N> rose 1.9 percent. The report comes in a
week that is heavy on retail earnings, from companies including Walmart
Inc <WMT.N> and Macy's Inc <M.N>, that could show how rising wages in
the United States are eating into margins.
Wage pressures could increasingly be an issue as earnings growth for S&P
500 companies is expected to slow to about 9 percent next year following
2018's tax-fueled gains, estimated at 24 percent, according to IBES data
At 7:19 a.m. ET, Dow e-minis <1YMc1> were up 161 points, or 0.63
percent. S&P 500 e-minis <ESc1> were up 19 points, or 0.7 percent and
Nasdaq 100 e-minis <NQc1> were up 63.25 points, or 0.93 percent.
The main indexes tumbled on Monday as shares of Apple Inc <AAPL.O> slid
5 percent after several suppliers to the iPhone maker cut their
forecasts, signaling that demand for iPhones could be softening.
Apple's shares edged lower on Tuesday. A key supplier and contract
electronics maker, Foxconn <2317.TW>, reported a weaker-than-expected
rise in quarterly profit.
Other tech and internet giants including Alphabet Inc <GOOGL.O>,
Amazon.com Inc <AMZN.O> and Netflix Inc <NFLX.O> rose more than 1
percent in premarket trading following sharp losses on Monday.
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Traders work on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., November 12, 2018. REUTERS/Brendan McDermid
After a stellar rally for technology shares that has fueled a decade-long gain
for U.S. stocks, appetite for the group has started to wane lately on concerns
about tighter regulation and demand for chipmakers.
Allocation to the global tech sector collapsed to the lowest since February
2009, with just 18 percent of investors saying they were overweight on the
sector, Bank of America Merrill Lynch's investor survey showed.
The survey also showed U.S. remains the most favored equity region for global
fund managers despite recent market wobbles, with the S&P 500 index broadly
expected to rise 12 percent more before peaking.
A report that China's top trade negotiator was preparing to visit the United
States before a meeting between the leaders of the world's two largest economies
helped early trading.
Oil prices fell more than 2 percent after U.S. President Donald Trump put
pressure on OPEC not to cut supply to prop up the market. [O/R]
Among other stocks, Advance Auto Parts Inc <AAP.N> rose 4.2 percent after the
auto parts maker raised full-year sales forecast and reported
better-than-expected third-quarter results.
Tyson Foods Inc <TSN.N> fell 3.4 percent after fourth-quarter revenue fell short
of Wall Street estimates.
(Reporting by Sruthi Shankar in Bengaluru)
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