MARKET SNAPSHOT: Stock Market Poised To Pull Back From Records As Bank Earnings Arrive

By Victor Reklaitis, MarketWatch , Ryan Vlastelica Features Dow Jones Newswires

Nasdaq debut for CarGurus

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U.S. stock-index futures pointed to a modestly lower open on Thursday, setting the equity market up for a small retreat from record levels as investors digested the first reads of the third-quarter earnings season.

Financial stocks were in focus after both J.P. Morgan Chase & Co.(JPM) and Citigroup Inc.(C) released their results, unofficially kicking off a season that analysts expect to be strong and extend the market's record-setting streak (http://www.marketwatch.com/story/third-quarter-earnings-seen-as-an-easy-beat-could-set-up-more-stock-market-records-2017-10-09).

J.P. Morgan posted earnings and revenue that beat expectations (http://www.marketwatch.com/story/jp-morgans-profit-buoyed-by-lending-2017-10-12), although its trading revenue was weak amid a quiet period for markets. Shares dipped 0.4% in premarket trading. Citigroup also reported a higher-than-expected profit (http://www.marketwatch.com/story/citi-earnings-beat-boosts-stock-2017-10-12), sending shares up 0.6% before the bell.

Both stocks have been strong performers over the past year, with J.P. Morgan up 42% and Citigroup gaining more than 50% over the past 12 months. The S&P 500 is up 19.5% over that same period.

What are the main benchmarks doing?

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S&P 500 futures slipped by 4.75 points, or 0.2%, to 2,548.25, while Dow Jones Industrial Average futures dipped by 21 points, or 0.1%, to 22,795.00. Nasdaq-100 futures gave up 4 points, or 0.1%, to 6,078.50.

On Wednesday, the Dow industrials edged up to an all-time closing of 22,872.89 (http://www.marketwatch.com/story/bank-earnings-lower-for-longer-means-buybacks-will-continue-2017-10-06), as the S&P 500 and Nasdaq Composite also set records.

The Dow has gained nearly 16% for the year, the S&P is up 14%, and the Nasdaq has risen 23%.

Read:The Dow's flirtation with 23,000 is a sign of the stock market's velocity (http://www.marketwatch.com/story/the-stock-markets-velocity-has-the-dow-flirting-with-230000-2017-10-05)

And see:Investors face 'mental exhaustion' in markets where nothing is 'normal' (http://www.marketwatch.com/story/investors-face-extreme-mental-exhaustion-due-to-high-valuations-low-volatility-2017-10-10)

What are strategists saying?

"Basic fundamentals are good, companies are making money, and I think the market will be relatively strong throughout earnings season, but I don't see a huge spike up between now and the end of the year because a lot [of earnings optimism] has been priced in," said Gary Droz, managing director at MainLine Private Wealth.

Equities have gone an unusually long time without a pronounced pullbacks, with dips of even 3% in short supply. Droz said this was something that merited watching.

"We don't want to lull ourselves into a complete coma. Anything could trigger a drawdown; markets need to breathe," he said.

Which stocks look like key movers?

Domino's Pizza Inc.(DPZ) reported earnings and sales that beat expectations (http://www.marketwatch.com/story/dominos-pizza-beats-profit-and-sales-expectations-but-stock-falls-2017-10-12).

Read:Bank earnings: 'Lower for longer' means buybacks will continue (http://www.marketwatch.com/story/bank-earnings-lower-for-longer-means-buybacks-will-continue-2017-10-06)

And see:Third-quarter earnings seen as 'an easy beat,' may bring more market records (http://www.marketwatch.com/story/third-quarter-earnings-seen-as-an-easy-beat-could-set-up-more-stock-market-records-2017-10-09)

Telecom (http://www.marketwatch.com/story/att-warns-of-lower-q3-revenue-profit-on-hurricanes-mexican-earthquakes-2017-10-11)AT&T Inc.(T), retailer (http://www.marketwatch.com/story/jjill-shares-plummet-after-outlook-cut-2017-10-11)J. Jill Inc.(JILL) and networking equipment maker (http://www.marketwatch.com/story/juniper-networks-shares-fall-after-profit-revenue-warning-2017-10-11)Juniper Networks Inc.(JNPR) look on track for down days after each company issued a profit warning late Wednesday.

CarGurus Inc.(CARG) is slated to have its trading Nasdaq debut on Thursday after pricing shares of its initial public offering above an expected range (http://www.marketwatch.com/story/cargurus-prices-ipo-above-expected-range-at-16-a-share-2017-10-11). The company helps buyers find deals on new and used cars.

What are other assets doing?

Bitcoin on Thursday was soaring to new all-time highs above $5,100 (http://www.marketwatch.com/story/bitcoin-soars-to-a-new-all-time-high-above-5100-2017-10-12).

European stocks (http://www.marketwatch.com/story/spanish-stocks-pull-back-after-rally-as-other-european-markets-struggle-for-direction-2017-10-12) were little changed, while most Asian markets closed higher, with Japan's Nikkei benchmark finishing at a fresh 21-year high (http://www.marketwatch.com/story/nikkei-keeps-rising-as-asian-markets-extend-gains-2017-10-11).

Gold futures gained, while oil futures pulled back as the International Energy Agency said the world's crude supply expanded (http://www.marketwatch.com/story/oil-supply-rises-as-us-production-keeps-up-pace-despite-hurricanes-iea-2017-10-12) in September on the back of steady U.S. production growth. The ICE U.S. Dollar Index was roughly flat after falling Wednesday as minutes from the last Fed meeting showed some policy makers wondered whether an interest rate rise (http://www.marketwatch.com/story/december-rate-hike-not-automatic-minutes-of-last-months-meeting-show-2017-10-11) was needed in December.

What could help drive markets?

Initial weekly jobless claims fell by 15,000 (http://www.marketwatch.com/story/unemployment-rolls-shrink-to-44-year-low-jobless-claims-show-2017-10-12) to 243,000 in early October to mark the lowest level in six weeks. Economists polled by MarketWatch had forecast claims to total 250,000.

The producer-price index rose 0.4% (http://www.marketwatch.com/story/us-wholesale-inflation-zooms-higher-in-september-2017-10-12), matching consensus expectations.

Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

On the Federal Reserve front, Fed Gov. Jerome Powell is due to give a speech about emerging-market economies at 10:30 a.m. Eastern Time in Washington, D.C.

Fed Gov. Lael Brainard, European Central Bank President Mario Draghi and former Fed chief Ben Bernanke are expected to take part in a panel discussion about monetary policy at 10:30 a.m. Eastern in Washington.

(END) Dow Jones Newswires

October 12, 2017 08:51 ET (12:51 GMT)