Stock futures trade lower, Amazon shares fall

Earnings to end the week will include oil giants Exxon Mobil and Chevron. Caterpillar and P&G will also report.

U.S. equity futures traded lower heading into the final trading session of the week.

The major futures indexes suggest a drop of more than 1% on the Nasdaq and 0.3% on the Dow.

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Amazon shares are down more than 6% in the premarket following quarterly results.

Amazon beat investors' expectations on earnings per share, but came up short on Wall Street's revenue estimates. The e-commerce and tech giant also lowered its third-quarter outlook.

AMAZON BEATS ON EARNINGS, FALLS SHORT ON SALES ESTIMATES

Amazon's second-quarter earnings per share came in at $15.02, beating estimates by $2.80. The firm's sales hit $113.1 billion for the quarter, failing to hit the $115.4 billion predicted by analysts polled by FactSet. 

Big oil will be in focus Friday morning when ExxonMobil and Dow member Chevron report 2Q results. Two more Dow companies will also report earnings: heavy equipment maker Caterpillar and household products giant Procter & Gamble.

On the economic calendar, the Commerce Department will post personal income and spending numbers for June. Economists surveyed by Refinitiv anticipate spending to rise 0.7% month-over-month after a flat May. Personal income, meantime, is expected to slip 0.3% in June after tumbling 2% the prior month. 

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Core personal consumption expenditures, which remove volatile food and energy prices, are anticipated to rise 0.6% for the month, comparable to May’s 0.5% rise. The Federal Reserve’s preferred measure of inflation, the year-over-year change in core PCE, is expected to rise 0.3 percentage points to 3.7%. That would mark the highest reading in more than 30 years.

Also, watch for the Employment Cost Index. It likely increased 0.9% in the second quarter, matching the first quarter’s rise. A higher-than-expected reading might rekindle inflation fears and put pressure on bonds and stocks.

Traders will also examine the Institute for Supply Management's Chicago Purchasing Managers’ index for July. The closely watched gauge of Midwest business activity is anticipated to slip a point and a half from June to 64.6.

Finally, the University of Michigan’s final index of consumer sentiment for July. It’s expected to hold steady from the preliminary reading of 80.8 two weeks ago, which would leave it down from June’s final reading 85.5.

In Europe, London's FTSE declined 0.8%, Germany's DAX fell 0.8% and France's CAC gave up 0.2%.

In Asia, Tokyo's Nikkei 225 fell 1.8%, the Hang Seng in Hong Kong declined 1.4% and China's Shanghai Composite index dropped 0.4%.

The yield on the 10-year Treasury note remained relatively stable. It edged lower to 1.26% from 1.27% late Thursday.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 34798 +33.18 +0.10%
SP500 S&P 500 4455.48 +6.50 +0.15%
I:COMP NASDAQ COMPOSITE INDEX 15047.699032 -4.54 -0.03%

Stocks on Wall Street bounced back from a two-day slide Thursday, placing the S&P 500 on pace for its second straight weekly gain.

The S&P 500 index rose 0.4% to 4,419.15, powered by broad gains. It is just below its most recent record high.

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Online brokerage Robinhood made an underwhelming debut on the Nasdaq, closing at $34.82, or 8.4% below its offering price of $38, which was the low end of its expected range.

The Dow Jones Industrial Average rose 0.4% to 35,084.53, while the Nasdaq added 0.1%, to 14,778.26. The Dow and Nasdaq also hovered just below their record highs set on Monday.

Helping ease some concerns on Wall Street about the pace of the economic recovery, the Commerce Department said the U.S. economy grew at a solid 6.5% annual rate last quarter.

There also was encouraging news on the broader employment picture, which has tended to lag the rest of the recovery. Claims for unemployment benefits dropped by 24,000 to 400,000 last week, the Labor Department reported.

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In other trading, U.S. benchmark crude oil lost 28 cents to $73.34 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil declined 24 cents to $75.81.

The Associated Press contributed to this report.