Dow futures down 270 points after retail sales data

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Stock-index futures pulled back Tuesday, extending a decline after retail sales data from October, indicating a lower start for equities a day after the S&P 500 and Dow Jones Industrial Average closed at records in a rally fueled by progress toward a COVID-19 vaccine.

What are major benchmarks doing?

Futures on the Dow Jones Industrial Average YM00, -0.85% fell 273 points, or 0.9%, to 29,592, while S&P 500 futures ES00, -0.69% were down 26 points, or 0.7%, at 3,597. Nasdaq-100 futures NQ00, +0.24% rose 18.50 points, or 0.2%, to 12,023.50.

The Dow DJIA, +1.59% on Monday advanced 470.63 points, or 1.6%, to close at 29,950.44, marking its first record finish since Feb. 12 and leaving it on the doorstep of the psychologically important 30,000 milestone. The S&P 500 SPX, +1.16% rose 41.76 points, or 1.2%, to close at a record 3,626.91. The Nasdaq Composite COMP, +0.80% rose 94.84 points, or 0.8%, to end at 11,924.13.

What’s driving the market?

Stock-index futures fell to session lows after data showed October retail sales rose 0.3% in October — matching the consensus forecast produced by a MarketWatch survey of economists.

Stocks rose Monday after Moderna Inc. MRNA, +9.57% said its COVID-19 vaccine candidate was 94.5% effective in preventing infections during a late-stage trial. A week earlier, Pfizer Inc. PFE, -3.51% and BioNTech SE BNTX, -13.66% announced their vaccine candidate was more than 90% effective.

Prospects for a vaccine prompted a rotation away from pandemic winners, including large-cap tech and internet stocks, in favor of more economically sensitive stocks.

While progress toward a vaccine is encouraging for 2021, investors have looked past a continued surge in COVID-19 cases and a lack of progress toward additional aid spending from Washington.

But analysts said uncertainty about the consumer could undercut the rally, putting the focus on retail sales data and other measures of consumer activity.

“If the consumer can prop up the U.S. economy while the vaccine comes online and a new fiscal package is passed early next year, the market would have all the ingredients for a strong rally despite the challenges posed by the pandemic,” said Boris Schlossberg, managing director at BK Asset Management, in a note.

“If however, the second wave shows that it is clearly taking its toll on mobility and consumer spending, the markets could begin to correct sharply given little evidence of any immediate relief,” he said.

October industrial production and capacity utilization figures were due at 9:15 a.m. Eastern., with production expected to rise 1.1% after a 0.6% fall in September. Utilization is seen rising to 72.3% from 71.5%.

Data on September business inventories and a November home builders index are set for release at 10 a.m. In the afternoon, several Fed bank presidents are slated to speak at a conference on racism and the economy.

Which companies are in focus?
  • Walmart Inc. WMT, +1.26% shares were down 1.7% in premarket trade after the retail giant and Dow component reported results that topped expectations.
  • Fellow Dow component Home Depot Inc. HD, +0.86% shares fell 1.5%, despite the home improvement retailer reporting fiscal third-quarter profit that beat expectations and sales that rose well above forecasts.
  • Shares of Tesla Inc. TSLA, -0.10% rose more than 12% in premarket trade after S&P Dow Jones Indices late Monday said it would add the electric-car maker to the S&P 500 beginning Dec. 21.
  • Shares of drugstore chains tumbled in premarket action after e-commerce giant Amazon.com Inc. AMZN, +0.07% said it would launch an online pharmacy. Walgreens Boots Alliance Inc. WBA, +3.25% shares were down more than 8%, while CVS Health Corp. CVS, +3.47% shares dropped nearly 7% and Rite Aid Corp. RAD, +9.28% shares were off 12%. Amazon shares were up 1.7%.
How are other markets faring?

The 10-year Treasury note yield TMUBMUSD10Y, 0.875% retreated 1.8 basis points to 0.88%. Bond prices move inversely to yields.

December gold futures GCZ20,   shed less than 0.1% at $1,886.20 an ounce on Comex. The U.S. crude benchmark CL.1, -0.89%  pulled back on Tuesday, off 0.2%, to reach $41.25 a barrel on the New York Mercantile Exchange.

In Asian stock, China’s CSI 300 000300, -0.19% closed 0.2% lower on Tuesday and Japan’s Nikkei NIK, +0.41% finished 0.4% higher.

The Stoxx Europe 600 SXXP, -0.55%  was trading at 387.78, down 2%. The U.K.’s FTSE benchmark UKX, -1.49%  was off 1.2% at 6,342.24.

In currencies, the greenback was down 0.4% against its major rivals at 92.351, based on trading in the ICE U.S. Dollar Index DXY, -0.28%.