Reuters

(Reuters)

Wall St. Set to Open Lower, Weighed Down by GE

Markets Reuters

Wall Street looked set to open slightly lower on Friday, weighed down by GE's disappointing forecast, with losses likely to be limited by strong reports from Microsoft and McDonald's.

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Microsoft's stock was set to open up 6.1 percent at an all-time high of $60.75 after the company said sales at its flagship cloud business doubled in the latest quarter.

McDonald's rose 3.10 percent after the fast-food chain reported better-than-expected quarterly revenue and profit.

GE's shares were off 1.10 percent in premarket trading after the industrial conglomerate lowered its full-year revenue growth target and narrowed its profit forecast.

The company said slow economic growth, particularly in the oil and gas business, weighed on revenue in the latest quarter.

"Although earnings have been coming in mixed, GE's comments of a sluggish economy is causing investors to take a step back," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

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Dow e-minis  were down 57 points, or 0.31 percent, with 25,025 contracts changing hands.

S&P 500 e-minis were down 7.25 points, or 0.34 percent, with 135,167 contracts traded.

Nasdaq 100 e-minis were down 6.5 points, or 0.13 percent, on volume of 21,209 contracts.

Reynolds American surged 17.24 percent after British American Tobacco's $47 billion-offer to buy the 58 percent of the tobacco company it doesn't already own.

PayPal rose 5.4 percent after the payments processor reported a better-than-expected rise in quarterly revenue.

A set of weak results from prominent names such as Verizon and Travelers on Thursday dampened hopes about the third quarter, sending the S&P 500 and the Dow lower at the close.

However, Microsoft's strong earnings after markets closed helped analysts raise their expectations for S&P 500 companies' third-quarter earnings.

Profits are now expected to have risen 1 percent in the quarter, up from the 0.5 percent estimated earlier, according to Thomson Reuters I/B/E/S.

About 78.5 percent of the 107 S&P 500 companies that have reported until Thursday have beaten earnings expectations.

Volatility in the markets are expected to increase as the U.S. presidential election draws near, while investors assess mixed signals from the Federal Reserve on the future path of interest rate hikes.

Oil prices were slightly higher after Russia reiterated its commitment to join a producer's output freeze agreement, but the dollar trading at a seven-month high capped gains. 

 

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)