Downdraft from overseas markets and mixed earnings news sent stock futures to some significant premarket losses on Wednesday.
XAutoplay: On | OffDow Jones industrial average, the S&P 500 and the Nasdaq 100 all cut 0.5% below fair value. Small caps fell harder, with Russell 2000 futures trading down 0.7%.
Markets in China and Japan tumbled in a broad sell off Wednesday, with Hong Kong’s Hang index down 1% and Tokyo’s Nikkei 225 faltering 1.6%, pointing the Nikkei toward its first weekly loss since the first week of September. The benchmark gained 23.1% from Sept. 8 through a intraday high on Tuesday.
The selling carried over into European trade, where Frankfurt’s DAX dived 1.2%, while the CAC-40 in Paris slumped 0.6% and London’s FTSE 100 was down 0.5% near midday.
Blackstone Group (BX) President and Chief Executive Hamilton James told Politico that stocks have built in some expectation for tax cuts included in the federal tax reform package heading toward a vote in the House on Thursday. But he called a potential failure of the effort a “modest negative” for the market: “I don’t think it’s a huge driver for the market. I don’t think the market is going to tank by any means,” he said.
Target Tumbles, FoxConn Bites Apple; Sorl Auto, Cargurus Soar
Target tanked 5% after reporting a smaller-than-expected third-quarter earnings decline and revenue growth in line with analyst forecasts. But management warned of a “highly competitive” holiday season. Shares ended up 15% from a June low, attempting to climb out of an 18-month consolidation.
Apple (AAPL)dipped 0.5%, possibly due partly to quarterly results reported in China Wednesday by Hon Hai Precision, also knwon as FoxConn, which assembles Apple’s iPhones and other products. Hon Hai earnings fell 39%, almost to half of analyst expectations, largely owing to iPhone X production problems.
Sorl Auto Parts (SORL) rocketed 46% higher after reporting a 159% earnings gain and a 59% advance in revenue for its third quarter. The move follows Tuesday’s 16% gain by rival Advanced Auto Parts (AAP), following its Q3 results.
Car lot operator Cargurus (CARG) drove ahead 12% in premarket trade after reporting a 56% sales gain and EPS of two cents in its third quarter, and raising its fourth-quarter revenue guidance above consensus views. The new issue ended Tuesday 86% above its October 12 IPO price.
IBD 50 stock YY (YY) swung up nearly 3%, receiving an upgrade to buy, from hold, from Jefferies after reporting a healthy third-quarter beat late Tuesday. The stock is pulled back in a test of support at its 10-week moving average, and in the fifth week of a shallow consolidation.
Consumer Prices, Empire State Survey, Weekly Oil Supplies
October consumer price data from the Labor Department, and the New York Federal Reserve’s Empire State Manufacturing Survey are both due out at 8:30 a.m. ET, along with October retail sales numbers from the Commerce Department.
September business inventories estimates from the Commerce department arrive at 10 a.m. ET, followed by the Energy Information Administration’s weekly oil stockpiles report at 10:30 a.m. ET.