Defeat for 'skinny' repeal of Obamacare in Senate casts doubt on Trump plans
Technology stocks looked set for another selloff on Friday, with Nasdaq-100 stock futures deep in the red after Amazon massively missed forecasts, as the broader market also pointed to a struggle.
Leading the way south, Nasdaq-100 futures slid 47 points, or 0.8%, to 5,862.75. S&P 500 futures fell 5.4 points, or 0.2%, to 2,466.50. Dow Jones Industrial Average futures eased 21 points to 21,722.
Those futures indicate the Dow may struggle to notch another closing record, as it did on Thursday (http://www.marketwatch.com/story/tech-stocks-poised-to-drive-another-record-day-on-wall-street-led-by-facebook-2017-07-27), when it ended 0.4% higher at 21,796.55.
Techs came under heavy pressure in that session, with the Nasdaq Composite Index closing 40 points, or 0.6%, lower at 6,382. At one point, it was down over 100 points. That selling weighed on the S&P 500 index , which closed off 0.1% to 2,475.42.
The tech malaise may in part stem from concerns over Amazon.com Inc.(AMZN) , which reported a 77% plunge in second-quarter earnings (http://www.marketwatch.com/story/amazon-earnings-fall-77-shares-drop-2017-07-27) after the close on Thursday. The ecommerce leader's shares were down 2.6% in thin premarket trading, after falling 3% late Thursday.
Read:Amazon's free-spending ways hit earnings, but don't expect a shift to thrift (http://www.marketwatch.com/story/amazons-free-spending-ways-hit-earnings-but-dont-expect-a-shift-to-thrift-2017-07-27)
Trump setback: Politics may also be weighing on investors minds. Republican leaders early Friday failed win backing for a "skinny" bill (http://www.marketwatch.com/story/senate-votes-against-skinny-bill-to-repeal-obamacare-2017-07-28) to repeal parts of the Affordable Care Act, in a tight Senate vote after a debate that went through the night.
Investors have been watching the U.S. political landscape closely for clues to whether U.S. President Donald Trump will ultimately be able to push through his tax cuts and stimulus packages. These are seen as potentially giving a boost to the U.S. economy.
The latest failure of Republicans and Trump to push through their plan to dismantle Obamacare bodes ill for economic plans, said Naeem Aslam, chief market analyst at ThinkMarkets.
"Let's just say that without those stimulus packages and the tax reforms, we could say good bye to the Trump dream," he said. "The GDP growth of 3 percent or higher which he promised is not going to see the daylight any time soon."
The dollar was back under pressure after the Senate health care vote, with the ICE Dollar Index down 0.11% to 93.76.
Earnings ahead:Exxon Mobil Corp. (XOM) and Chevron Corp.(CVX) will report ahead of the bell. Also on the early list are Merck & Co. Inc.(MRK) and American Airlines Group(AAL) .
See:Exxon earnings -- Will stock trade higher on expected second-quarter beat? (http://www.marketwatch.com/story/exxon-earnings-will-stock-trade-higher-on-expected-second-quarter-beat-2017-07-20)
And:Chevron earnings -- Wall Street is looking for updates on natural-gas projects (http://www.marketwatch.com/story/chevron-earnings-wall-street-is-looking-for-updates-on-natural-gas-projects-2017-07-24)
Economic docket: On the data front, a second-quarter reading on gross domestic product is scheduled for release at 8:30 a.m. Eastern Time. Forecasts are for growth of 2.8%, compared with 1.4% in the previous quarter.
A report on the employment cost index in the second quarter is due at the same time, while the University of Michigan's consumer sentiment survey for July is due at 10 a.m. Eastern.
Other markets: European and Asian stocks (http://www.marketwatch.com/story/asian-stocks-tumble-on-heels-of-us-tech-selloff-2017-07-28) mostly fell Friday on the heels of that slump for U.S. tech stocks.
(END) Dow Jones Newswires
July 28, 2017 05:00 ET (09:00 GMT)