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U.S. Stocks May Give Back Ground On Disappointing Earnings News

wallstreet oct04 29apr22 lt

Following the rally seen over the course of the previous session, stocks are likely to move back to the downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.8 percent.

A negative reaction to the latest batch of earnings news is likely to weigh on Wall Street, with shares of Amazon (AMZN) tumbling by 10 percent in pre-market trading.

The steep drop by Amazon comes after the online retail giant reported an unexpected first quarter loss and provided disappointing revenue guidance for the current quarter.

Shares of Apple (AAPL) are also seeing pre-market weakness after the tech giant reported better than expected fiscal second quarter earnings but warned supply chain issues would hurt third quarter sales by as much as $8 billion.

Semiconductor giant Intel (INTC) may also move to the downside after reporting first quarter results that exceeded analyst estimates but issued weak guidance for the second quarter.

On the U.S. economic front, a report released by the Commerce Department showed U.S. personal income increased by slightly more than expected in the month of March, while U.S. personal spending jumped by much more than anticipated.

The Commerce Department said personal income rose by 0.5 percent in March after climbing by an upwardly revised 0.7 percent in February.

Economists had expected personal income to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

The report also showed personal spending jumped by 1.1 percent in March after advancing by an upwardly revised 0.6 percent in February.

Personal spending was expected to increase by 0.7 percent compared to the 0.2 percent uptick originally reported for the previous month.

Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of April. The Chicago business barometer is expected to drop to 57.0 in April from 62.9 in March.

The University of Michigan is also due to release its revised reading on consumer sentiment in the month of April. The consumer sentiment index for April is expected to be downwardly revised to 62.0 from the preliminary reading of 65.7.

After another rollercoaster ride early in the session, stocks moved sharply higher over the course of the trading day on Thursday. The tech-heavy Nasdaq led the rally after ending Wednesday's trading at its lowest closing level in over a year.

The major averages pulled back off their highs going into the close but held on to strong gains. The Dow jumped 614.46 points or 1.9 percent to 33,916.39, the Nasdaq spiked 382.59 points or 3.1 percent to 12,871.53 and the S&P 500 surged 103.54 points or 2.5 percent to 4,287.50.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index shot up by 2.4 percent, while Hong Kong's Hang Seng Index soared by 4 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has jumped by 1.1 percent, the French CAC 40 Index is up by 0.7 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.

In commodities trading, crude oil futures are climbing $0.91 to $106.27 a barrel after surging $3.34 to $105.36 a barrel on Thursday. Meanwhile, after inching up $2.60 to $1,891.30 an ounce in the previous session, gold futures are jumping $20.60 to $1,911.90 an ounce.

On the currency front, the U.S. dollar is trading at 130.26 yen versus the 130.85 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0514 compared to yesterday's $1.0499.

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