Selloff for tech stocks weighs on European and Asian markets
Futures for the Dow Jones Industrial Average signaled another gain for the blue-chip gauge on Tuesday, while tech-laden stock indexes looked poised to struggle.
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The Dow has been rallying to fresh records over the past week, thanks in part to progress on a U.S. tax overhaul (http://www.marketwatch.com/story/senate-passes-tax-bill-advancing-top-republican-priority-2017-12-02) in Washington, but a selloff for tech stocks has weighed on the Nasdaq Composite and S&P 500.
What are the main benchmarks doing?
Dow Jones Industrial Average futures tacked on 46 points, or 0.2%, to 24,350, while S&P 500 futures were up 2.5 points, or 0.1%, to 2,640. Futures for the tech-heavy Nasdaq-100 were little changed at 6,268.25 after paring losses.
On Monday, the Dow finished modestly higher at a new record (http://www.marketwatch.com/story/dow-futures-soar-200-points-as-markets-get-ready-to-rally-on-tax-plan-progress-2017-12-04), after a gain of more than 200 points failed to stick. The S&P 500 closed 0.1% lower, and the Nasdaq Composite shed 1.1%. Analysts have said investors are taking profits in tech stocks (http://www.marketwatch.com/story/brace-for-more-tech-pain-and-more-cheer-for-the-stock-markets-sad-sacks-2017-11-30), which have scored big gains this year.
Read:Chipmaker, software stocks close sharply lower as tax overhaul progresses (http://www.marketwatch.com/story/chipmakers-software-developer-stocks-hit-hard-as-tax-reform-progresses-2017-12-04)
And see:Portfolio managers are losing their enthusiasm for highflying tech stocks (http://www.marketwatch.com/story/portfolio-managers-are-losing-their-enthusiasm-for-highflying-tech-stocks-2017-12-01)
What are strategists saying?
"Doubts are starting to surface as to what extent the tax cuts can actually boost an already strong U.S. economy, which is growing at 3.3% and close to full employment," said Fiona Cincotta, senior market analyst at City Index, in a note. "Could the benefits just be a little less than what investors were dreaming of?"
"For the time being, stocks are prepared to give tax reform the benefit of the doubt," she said.
Don't miss:If you're panicking over tech stocks and taxes, here's a good reason to stop (http://www.marketwatch.com/story/if-youre-panicking-over-tech-stocks-and-taxes-heres-a-good-reason-to-stop-2017-12-05)
Which stocks look like key movers?
Mastercard Inc.'s stock (MA) rose 0.4% in premarket action after the payments company announced a new $4 billion stock buyback program, along with a dividend hike (http://www.marketwatch.com/story/mastercard-to-buy-back-4-billion-in-stock-hike-dividend-2017-12-05).
Regal Entertainment Group's stock (RGC) jumped 7% premarket after British counterpart Cineworld Group PLC(CINE.LN) agreed to buy it for $3.6 billion (http://www.marketwatch.com/story/cineworld-buying-regal-for-36-billion-to-reach-into-us-movie-theater-market-2017-12-05), creating the world's second-largest operator of movie theaters. Regal confirmed last week (http://www.marketwatch.com/story/regal-entertainments-stock-soars-after-confirming-buyout-talks-with-cineworld-2017-11-29) that it was in buyout talks with Cineworld (CINE.LN) .
Shares in Amazon.com Inc.(AMZN) edged up by 0.2% ahead of the open as the e-commerce giant launched its full offering in Australia on Tuesday, but analysts said it was a "patchy" initial effort (http://www.marketwatch.com/story/amazon-finally-launches-in-australia-but-its-a-patchy-start-2017-12-05). The foray has been expected to provide an important new beachhead for the online retailer's global distribution network (https://www.wsj.com/articles/welcome-to-the-jungle-amazons-australian-expedition-to-rattle-retailers-1495013400?mod=mktw).
Car-parts seller (http://www.marketwatch.com/story/autozone-shares-jump-6-premarket-after-better-than-expected-earnings-2017-12-05)AutoZone Inc.(AZO) and clothing manufacturer (http://www.marketwatch.com/story/g-iii-apparel-shares-surge-6-premarket-after-profit-beat-and-raised-guidance-2017-12-05)G-III Apparel Group Ltd.(GIII) each rose 6% as the companies posted better-than-expected quarterly earnings.
What are other assets doing?
European equities (http://www.marketwatch.com/story/european-stocks-hampered-by-losses-for-tech-shares-2017-12-05) largely traded lower, and Asian markets mostly closed with losses (http://www.marketwatch.com/story/tech-stock-selloff-weighs-on-asian-markets-2017-12-04), as drops for tech stocks weighed on those markets as well. Oil futures (http://www.marketwatch.com/story/oil-prices-hold-steady-after-soft-start-to-the-week-2017-12-05) were down modestly, while gold futures and the ICE U.S. Dollar Index (http://www.marketwatch.com/story/pound-slides-to-6-day-low-as-brexit-talks-hit-deadlock-again-2017-12-05) were little changed. The British pound slumped to an almost one-week low on Tuesday, hurt by concerns over the U.K.'s Brexit talks hitting another wall.
What could help drive markets?
An October figure for the U.S. trade deficit came in larger than expected. Trade deficit jumped by 8.6% to $48.7 billion.
Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
At 9:45 a.m. Eastern, a November reading on Markit's purchasing managers' index for services is expected to arrive, then the November number for ISM's non-manufacturing index is due at 10 a.m. Eastern. Economists predict the ISM gauge will come in at 59.0%.
(END) Dow Jones Newswires
December 05, 2017 09:00 ET (14:00 GMT)