Some jitters after Spain signals move to strip Catalonia of independence
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U.S. stock futures fell sharply on Thursday, putting record levels for major indexes on the line, as technology-related shares such as eBay Inc., Apple Inc. and Nvidia Inc. took a sharp tumble.
Equity markets elsewhere were also under pressure. Hong Kong's Hang Seng Index closed sharply lower, while European and Spanish stocks fell on news the Spanish government is gearing up to strip Catalonia (http://www.marketwatch.com/story/spain-to-trigger-direct-rule-of-catalonia-as-standoff-continues-2017-10-19) of its autonomy this weekend.
What are stock-index futures doing?
Dow Jones Industrial Average futures pulled back from a deeper 100-point-plus loss earlier Thursday, but were still down 79 points, or 0.3%, to 23,034. Meanwhile, S&P 500 futures dropped 10.6 points, or 0.4%, to 2,549.50. The weakness was more pronounced for Nasdaq-100 futures , which slumped 38.50 points, or 0.6%, to 6,080.50.
All three benchmarks closed at records on Wednesday (http://www.marketwatch.com/story/dow-industrials-on-track-to-stay-around-23000-milestone-2017-10-18). The Dow Jones Industrial Average climbed 160.16 points, or 0.7%, to 23,157.60, finishing above the 23,000 level for the first time. The S&P 500 index rose 1.9 points, or 0.1%, to 2,561.26, and the Nasdaq Composite edged up 0.56 point to 6,624.22.
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See:Dow 23,000 marks fresh history for blue chips (http://www.marketwatch.com/story/dow-23000-marks-fresh-history-for-blue-chips-2017-10-17)
And check out:Dow's historic close above 23,000 belies a flicker of weakness (http://www.marketwatch.com/story/dows-historic-close-above-23000-belies-a-flicker-of-weakness-2017-10-18)
(http://www.marketwatch.com/story/dow-23000-marks-fresh-history-for-blue-chips-2017-10-17)What could drive markets?
Jitters over the standoff between Spain and Catalonia continue, after Catalan President Carles Puigdemont failed to meet a demand to give up the region's push for independence. The Madrid government responded by suggesting it will trigger the process for imposing central control -- known as the "nuclear option" -- when it holds a special cabinet meeting on Saturday. A suspension of autonomy in Catalonia could potentially spur fresh protests and instability for one of the eurozone's biggest members.
Earnings season continues, with results from Philip Morris International Inc. (PM) and Verizon Communications Inc. (VZ) due ahead of the market open. After the close, PayPal Holdings Inc. (PYPL) is scheduled to report.
What are strategists saying?
"To me, it appears that the Catalan impasse has triggered a global selloff across the equity markets, because the Asian session was rather quiet. The selloff really picked up as European traders stepped in," said Ipek Ozkardeskaya, senior market analyst at LCG, in emailed comments.
"I believe that the U.S. stocks are upbeat at the moment as the U.S. earnings have surprised on the upside this far. I would rather expect a correction into the U.S. open. [The] Catalan crisis may not dishearten the U.S. equity traders who seem to be on fire!" Ozkardeskaya added.
"I think we're simply seeing a small pullback driven by profit-taking following what has been a very gradual but long run of record high days," said Craig Erlam, senior market analyst at OANDA, in emailed comments. "Expectations for earnings season seem quite high, so I don't currently expect too much downside to result from this, barring any unforeseen shocks."
Which stocks are Wall Street following?
Ebay Inc.(EBAY) fell nearly 6% in thin, premarket action after the online marketplace posted higher-than-expected revenue, but cut its annual profit outlook for the second straight quarter. (https://www.wsj.com/articles/ebay-shares-fall-on-lowered-profit-outlook-1508361244)
Other technology shares were dragged lower in premarket trading, with Apple Inc.(AAPL) down 1.5%, Nvidia Corp.(NVDA) sliding 1.4% and Netflix Inc.(NFLX) down nearly 1%.
Philip Morris International Inc.(PM) and Verizon Communications Inc. (VZ) will report ahead of the bell, with PayPal Inc. (PYPL) coming after the close.
What are other assets doing?
European stocks fell 0.5%. Spain's IBEX 35 index was down 0.8% as the Spain-Catalonia standoff continued.
In Asia , Hong Kong's Hang Seng Index closed down 1.9% and the Shanghai Composite lost 0.3%. Data showed growth slowed in China in the third quarter (http://www.marketwatch.com/story/china-gdp-growth-slows-in-third-quarter-2017-10-18).
Oil prices fell sharply. West Texas Intermediate crude dropped 68 cents, or 1.3%, to $51.58 a barrel, while Brent crude slid 68 cents, or 1.2%, to $57.45 a barrel.
Gold futures were modestly higher, while ICE U.S. Dollar Index was flat. The euro was trading higher against the dollar at $1.1806.
(END) Dow Jones Newswires
October 19, 2017 06:09 ET (10:09 GMT)