By Ryan Vlastelica
Red Hat falls after results
U.S. stock-index futures were slightly higher on Thursday,
indicating the market's upswing remains intact, with major indexes
edging ever closer to record levels.
Where are the major benchmarks trading?
Futures for the Dow Jones Industrial Average rose 24 points to
26,486 while S&P 500 futures rose 2 points to 2,917 and futures
for the Nasdaq-100 were up 7 points to 7,533.75. All three were up
about 0.1%.
On Wednesday, both the Dow and the S&P rose, with the
S&P posting its seventh rise of the past eight sessions. That
left the benchmark index just 0.3% below its all-time closing high,
while the Dow is 0.8% below its own. If the Dow were to hit a
record, that would put an end to its longest streak without a
record since the stretch that occurred between May 2015 and July
2016, according to the Dow Jones Data Group.
The Nasdaq fell slightly on Wednesday, pressured by the latest
leg lower in technology stocks, one of the worst-performing sectors
of September.
Read about how recent trading on Wall Street has been quiet and
lacking in volatility
(http://www.marketwatch.com/story/what-trade-fears-us-stock-investors-are-extremely-calm-2018-09-18)
What's driving markets?
Trading on Wall Street has been relatively subdued now that
earnings season is largely over and there have been few major
economic indicators released this week. That has left an opening
for markets to be driven by the latest developments on trade.
Among recent developments, President Donald Trump earlier this
week reiterated his hard-line stance on China and said the U.S. had
"no choice" but to levy another $267 billion in duties on China.
That would come on top of announced tariffs on about $200 billion
in Chinese goods announced late Monday. China responded with
tariffs of 5% to 10% on $60 billion worth of U.S. products that
will take effect Sept. 24, and said it may introduce more measures
if the U.S. goes ahead with higher tariffs.
Technology stocks have had some of the highest correlation to
the trade issue as they generate a hefty percentage of their
revenue from outside the U.S. and because they depend on Asian
markets for their supply chains. The sector is down 2% thus far
this month, making it the largest drag on stocks in September.
Year-to-date, however, it is up 17.6%, far above the S&P's 8.8%
rise.
While many are concerned that a full-blown trade war will become
a huge headwind to global economic growth, investors have
repeatedly shrugged off the issue over the past several months,
choosing instead to focus on signs of improving economic
fundamentals.
Read:How trade-war fears have become less of a factor for
stock-market investors
(http://www.marketwatch.com/story/how-trade-war-fears-have-become-less-of-a-factor-for-stock-market-investors-2018-09-18)
See also:Not just tech: The stock-market rally is broader than
it's given credit for
(http://www.marketwatch.com/story/not-just-tech-the-stock-market-rally-is-broader-than-its-given-credit-for-2018-09-19)
Trading on Thursday could also be driven by the latest economic
data, which will include weekly jobless claims and the September
Philadelphia Fed index, which is seen rising to 19.6 from 11.9 in
the previous month. Both will be released at 8:30 a.m. ET. After
the market opens, reads on existing-home sales and leading economic
indicators, both for August, will be released, as will a read on
second-quarter household debt.
What are market analysts saying?
"Trade tensions have stepped up, but you wouldn't know it to
look at European and U.S. equity markets. The $200 billion worth of
tariffs from Trump, and Beijing's reaction weren't exactly a
surprise. Investors are cautiously optimistic as that round of
tariffs weren't too severe," said David Madden, market analyst at
CMC Markets UK.
What stocks are in focus?
Shares of Red Hat Inc. (RHT) fell 5.4% in premarket trading a
day after it reported revenue that was below expectations
(http://www.marketwatch.com/story/red-hat-stock-drops-on-revenue-miss-weak-outlook-2018-09-19)
and gave an outlook that was below the analyst consensus.
Broadly speaking, the financial sector (XLF) could continue to
attract attention a day after it closed at a multimonth high, a
move that coincided with the yield on the 10-year U.S. Treasury
note nearing its highest level of the year.
Marijuana producer Tilray Inc. will likely remain in focus
following an extremely volatile patch of trading
(http://www.marketwatch.com/story/why-tilray-stock-is-susceptible-to-wild-price-swings-2018-09-19),
which resulted in it being halted five times in less than an hour
on Wednesday. The stock has jumped nearly 600% over the course of
the past month, making it one of the most high-profile bets in the
legal cannabis space.
Mining giant Rio Tinto (RIO.LN) unveiled plans to buy back a
swath of its Australia-listed shares
(http://www.marketwatch.com/story/rio-tinto-outlines-32-billion-share-buyback-plan-2018-09-20)
before the end of the year as part of its move to return about $3.2
billion in proceeds from the sale of coal assets to its
shareholders.
British regulators said Comcast Corp. (CMCSA) and 21st Century
Fox Inc. (FOXA) will settle their takeover battle
(http://www.marketwatch.com/story/comcast-fox-to-settle-battle-for-sky-by-auction-2018-09-20)
for Sky PLC via an auction starting Friday.
Micron Technology Inc. (MU) could be in focus. The chip maker is
scheduled to report its quarterly results after the market
closes.
Read a preview of Micron's earnings
(http://www.marketwatch.com/story/micron-earnings-after-a-quarter-of-debate-how-bad-has-the-memory-market-gotten-2018-09-18)
Where are other markets trading?
Asian stocks mostly rose on Thursday, as investors mostly
shrugged off the trade tensions with the U.S. Japan's Nikkei rose
for a fifth straight session
(http://www.marketwatch.com/story/asian-markets-mostly-rise-as-nikkei-eyes-5th-straight-gain-2018-09-19).
Crude-oil prices rose 0.5% while the price of gold was little
changed. The U.S. dollar index lost 0.3%.
(END) Dow Jones Newswires
September 20, 2018 08:21 ET (12:21 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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