Stock futures traded flat ahead of Tuesday’s open as company news and another drop in oil prices factored into early trade.
Futures for the Dow Jones industrial average and the S&P 500 traded a fraction below fair value. Futures for the Nasdaq 100 and Russell 2000 were narrowly higher.
McDonald’s Gets Uptrade, Lennar Beats, Tesla Cleared By NTSB
Trade was generally quiet, but McDonald’s (MCD) jumped 0.7% to lead the Dow industrials. Cowen & Co. upgraded the stock to outperform, from market perform. Exxon Mobil (XOM) and Chevron (CVX) were the Dow’s early losers, down 0.7% and 0.9%, respectively.
Tesla (TSLA) shares popped nearly 3% in premarket trade after a report released by the National Safety Transportation Board found no fault in the automated pilot system involved in a highly publicized crash of a Model S in which its driver was killed in May 2016. The report said the driver ignored the automation program’s repeated warnings to keep his hands on the wheel.
Separately, Bloomberg reported that Tesla was near an agreement with the city of Shanghai that would allow it to establish a joint venture and set up manufacturing operations in China. Tesla shares were extended at the end of Monday’s session, trading near highs after clearing a three-weeks tight pattern in May.
Homebuilder Lennar (LEN) muscled up 4% after reporting its fiscal second-quarter revenue and earnings topped expectations by broad margins. The move suggests an early breakout above a 53.89 buy point in a flat base. Not all premarket moves carry through to regular trade.
On the IBD 50 list, Ichor Holding (ICHR) scrambled 5% higher ahead of the open. The maker of chip manufacturing equipment rebounded in quiet trade on Friday and Monday after a test of support at its 10-week moving average.
Clinical research leader Parexel International (PRXL) swung up more than 4% after news that it had agreed to be taken private in a $4.6 billion buyout from private equity firm Pamplona Capital. Pamplona agreed to pay $88.10 a share. Parexel shares are up 31% since news reports first stirred speculation of a buyout in early May.
Oil Dives, Fischer Cautions Global Housing Markets
Crude oil traded down a full 2% in early action, as news reports showed rising production in Libya and Nigeria. West Texas Intermediate hung well below $44 a barrel to hit its lowest level since November. The American Petroleum Institute releases its weekly oil inventory and demand estimates after the market closes, ahead of the Energy Information Administration’s report on Wednesday.
Fed Vice Chairman Stanley Fischer spoke in Amsterdam on Tuesday and cautioned that home prices were high and rising in several countries, and said that, in the U.S., Fannie Mae, Freddie Mac and the Federal Housing Administration were now the dominant mortgage lenders, according to Bloomberg.
Boston Federal Reserve Bank President Eric Rosengren is scheduled to speak at 8:30 a.m.ET. President Robert Kaplan of the Dallas Federal Reserve speaks at 3 p.m. ET.