The market’s sell-off appeared set to deepen Thursday, as mixed earnings news and weak overseas trade added to premarket pressure.
The Nasdaq led the declines, down nearly 0.3% in premarket trade. Futures for the Dow Jones industrial average nosed 0.2% below fair value, while S&P 500 futures dipped 0.1%. Small caps slightly outpaced on the downside, with Russell 2000 futures off 0.4%.
The appointment late Wednesday of former FBI Director Robert Mueller as special counsel to lead the inquiry into Russia’s possible tampering with the 2016 U.S. presidential election salved the general mood in Washington, D.C. But markets leaned toward another session of revaluation, as the outlook for initiatives pledged by the Trump administration had been called into doubt.
Early Movers: Cisco, Wal-Mart, Incyte, Alibaba
Blue chips were active in early trade. Cisco Systems (CSCO) crumbled 8%, the worst premarket move among the Dow industrials. The networking software and gear leader reported mixed fiscal third-quarter results late Wednesday.
Wal-Mart (WMT) muscled up nearly 3% ahead of the open. Its first-quarter results were also mixed, but a 63% spike in online sales cheered investors. Shares ended Wednesday less than 3% below their May 9 high.
Alibaba Group Holding (BABA) dipped 1% on mixed fiscal fourth-quarter results. China’s online retailing giant reported a 37% earnings gain, below expectations, although a 60% rise in revenue topped analyst targets. The stock has advanced in 11 of 12 recent weeks, and is up 15% after clearing a cup-with-handle base in March.
Biomed Incyte (INCY) hammered out an 8% premarket gain. The company announced positive trial results of its lung cancer treatment epacadostat. The stock has pulled back more than 20% from a March high.
L-Brands (LB) climbed 5% after reporting a narrow first-quarter earnings beat and despite weaker-than-forecast Q2 earnings guidance.
Japan Dives; Europe’s Markets, Brazil Issues Under Pressure
Asia’s markets ended Thursday’s session lower, with the Shanghai Composite down 0.,5% and Hong Kong’s Hang Seng Index giving up 0.6%. In Japan, Tokyo’s Nikkei 225 dived 1.3%, hurt by political events in the U.S. despite better-than-expected first-quarter GDP data.
Europe’s markets dropped hard in morning trade: London’s FTSE 100 fell 1.4%, Paris CAC-40 dropped 1.2% and the DAX in Frankfurt was down 0.9% near midday.
Brazil-related issues were under early selling pressure after news reports there accused President Michel Temer of bribery.
Futures for the iShares MSCI Brazil Capped ETF (EWZ) traded at a steep 16% loss. Banks were among the hardest hit, with Itau Unibanco (ITUB) diving 15% and Banco Bradesco (BBD) toppling 14% before the market opened.
Jobless Claims, Philly Fed Survey Coming Up
Weekly initial jobless claims are due from the Labor Department at 8:30 a.m. ET, along with the Philadelphia Federal Reserve’s May Manufacturing Business Outlook Survey. Leading economic indicators from the Conference Board are scheduled for 10 a.m. ET release. Loretta Mester, President of the Cleveland Federal Reserve, speaks at 1:15 p.m. ET.