Nike shares surge premarket; session marks end of month, quarter and first half
U.S. stock futures on Friday were hanging on to modest gains after data on spending and consumer inflation came in weaker than expected, with investors looking to close out a volatile week that could signal the reemergence of sharp moves on Wall Street.
In data, spending in May was barely higher, as Americans chose to save more money instead. Meanwhile, consumer inflation also slowed, conflicting with the Federal Reserve's assessment of transitory sluggishness in prices.
Dow Jones Industrial Average futures rose 35 points, or 0.1%, to 21,290, and S&P 500 futures tacked on 3 points, or 0.2%, at 2,423.00. Nasdaq-100 futures were down 6 points, or 0.1%, at 5,647.
The indicated gains would come after the S&P 500 and Dow industrials on Thursday suffered (http://www.marketwatch.com/story/sp-500-poised-to-ride-higher-on-financial-wave-but-nasdaq-signals-a-turn-lower-2017-06-29) their worst one-day declines since May, hurt by another selloff in technology stocks that more than outweighed a climb for financial shares (XLF).
The S&P 500 stumbled lower by 20.99 points, or 0.9%, to finish at 2,419.70, while the Dow Jones Industrial Average fell 167.58 points, or 0.8%, to close at 21,287.03. The tech-heavy Nasdaq Composite Index sank 90 points, or 1.4%, to end at 6,144.35.
"It has been a tough week for the FANG (Facebook, Apple, Netflix and Google) stocks with their prices falling between 3% and 6% since Monday," said William O'Loughlin, an investment analyst at Rivkin Securities, in Friday note.
Stocks this week were buffeted by central banks, as bond yields rose and the dollar fell on comments from central bankers signaling a potential receding of easy-monetary policy. Investors repriced expectations for the European Central Bank and the Bank of England to begin embarking on withdrawing monetary stimulus.
Read:Central banks set up investors for a long, hard road back to 'normal' (http://www.marketwatch.com/story/investors-face-a-long-hard-road-back-to-normal-2017-06-29)
And see:Here's why the stock market is spooked by central bankers (http://www.marketwatch.com/story/heres-why-the-stock-market-is-spooked-by-central-bankers-trump-agenda-delays-2017-06-29)
But Wall Street's main benchmarks were still on track to post gains for the second quarter, which ends Friday. The session will also mark the close of trading for the week, the month of June and the first half of the year.
"We are cautiously optimistic on the outlook for U.S. equities, but S&P 500 earnings growth expectations already look high and are unlikely to be revised higher, unless there is progress with fiscal stimulus domestically (e.g., tax reform) or global growth continues to surprise on the upside," wrote Joyce Chang, global head of research at J.P. Morgan, in a mid-year outlook.
Next week, equity trading will be shortened by the Independence Day holiday on Tuesday.
Crunching numbers: Through Thursday, the Nasdaq was on course for a weekly loss of 1.9% and a monthly decline of 0.9%. But it was in line for a second-quarter rise of 3.9%, which would be a fourth straight quarter of gains. For the first half, the index is on track for a 14% gain.
The S&P 500 was looking at a weekly decline of 0.8%, but a June increase of 0.3%. It was on course for 2.4% gain for the second quarter and an advance of 8.1% for the first half.
The Dow industrials were on track for a weekly fall of 0.5%. But the index could log a June advance of 1.3% and a second quarter rise of 3%. For the first six months of 2017, it is looking at a move of 7.7% higher.
Both the S&P 500 and the Dow industrials are poised for a seventh consecutive quarterly rise.
Check out:it has been an ugly first half for commodities in 2017 (http://www.marketwatch.com/story/its-been-an-ugly-first-half-for-commodities-in-2017-2017-06-29)
And read:Dollar bulls have a lot to worry about in second half of 2017 (http://www.marketwatch.com/story/dollar-bulls-have-a-lot-to-worry-about-in-second-half-of-2017-2017-06-29)
Economic docket:Consumer spending (http://www.marketwatch.com/story/consumer-spending-is-weak-in-may-but-so-is-inflation-2017-06-30)rose 0.1% last month after back-to-back 0.4% gains in April and March, matching expectations by economists polled by MarketWatch.
The PCE index, the Federal Reserve's preferred inflation gauge, fell 0.1% to mark the second decline in three months. Expectations for a 0.1% increase.
Looking ahead, the Chicago business barometer, or Chicago PMI, for June is due at 9:45 a.m. Eastern. That'll be followed at 10 a.m. Eastern by the University of Michigan's final June update on consumer sentiment for the month.
The Federal Reserve's aim for continued interest-rate hikes appears unwarranted at this time, James Bullard, president of the St. Louis Fed, said Friday.
"The committee has been too hawkish for the [economic] data during the last 90 days or so," Bullard said on CNBC (http://www.cnbc.com/2017/06/30/feds-bullard-says-u-s-rate-hikes-too-aggressive-for-data.html). "The data has not been that great considering that we got going on this three-hike process in December, March and June."
Bullard doesn't sit on the Fed's current rate-setting board.
See: MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic).
Stocks in focus:Nike Inc. (NKE) shares sprang up 5.6% premarket after the sportswear giant late Thursday posted better-than-expected quarterly profit and sales (http://www.marketwatch.com/story/nike-jumps-7-premarket-after-earnings-beat-amazon-deal-2017-06-30). Nike also confirmed a deal to sell shoes through Amazon.com (http://www.marketwatch.com/story/nike-confirms-deal-to-sell-shoes-through-amazon-2017-06-29) Inc. (AMZN).
Bank of America Corp.(BAC) was up 1% ahead of the bell after Warren Buffett's Berkshire Hathaway Inc. (BRKA) said it would exercise warrants to buy 700 million shares (http://www.marketwatch.com/story/warren-buffetts-berkshire-hathaway-to-exercise-warrants-to-buy-700-mln-bank-of-america-shares-2017-06-30) of the bank's common stock when the lender's dividend increase goes into effect.
Other markets: The ICE Dollar Index , which measures the buck against a basket of six currencies, was mostly flat, while gold slipped.
Asian stocks dropped sharply (http://www.marketwatch.com/story/nikkei-dives-under-20000-as-asian-markets-sharply-pull-back-2017-06-29) as the central bank-spurred bond selloff spread to the region (http://www.marketwatch.com/story/bond-selloff-spreads-to-asia-with-japanese-yields-at-multimonth-high-2017-06-30). European stocks latched onto gains (http://www.marketwatch.com/story/european-stocks-inch-higher-after-sharpest-selloff-in-9-months-2017-06-30) after their worst selloff in nine months on Thursday.
U.S. oil futures were up roughly 1%, above $45 a barrel.
(END) Dow Jones Newswires
June 30, 2017 09:13 ET (13:13 GMT)