Wall Street set to open lower as Amazon weighs on tech stocks

Updated: Fri, Jul 28, 2017
06:39 pm
Reuters

U.S. stock indexes looked set to open lower on Friday as Amazon`s profit miss took a toll on technology shares.

Amazon`s shares were down 3.15 percent in premarket trading after it reported a 77 percent drop in profit as its rapid and costly expansion into new shopping categories and countries showed no sign of slowing.

The fall weighed on the tech index, which has been the best performing sector this year, leading the S&P 500`s 10.6 percent run in 2017.

Facebook, Google parent Alphabet and Netflix, part of the high-flying "FANG" stocks, were also lower.

Risk sentiment also took a hit following the failure of Republicans to repeal Obamacare in a tight Senate vote overnight.

Investors are worried about the ability of President Donald Trump to legislate his pro-growth agenda of tax reform and higher spending on infrastructure.

"It appears that Obamacare has become a nightmare for Trump and not good news for the markets as well," said Naeem Aslam, chief market analyst at ThinkMarkets.

"The ability of Trump to deliver on his many promises such as tax and stimulus packages are really shattered. This is going to have a negative impact on the markets as the Trump trade would wind up even further."

Despite a fall in tech and transport stocks, the Dow industrials posted a record closing high on Thursday, helped by strong quarterly earnings.

The second-quarter earnings of the S&P 500 companies are expected to have risen 10.7 percent, compared with an 8 percent increase expected at the start of the month, according to Thomson Reuters I/B/E/S.

Dow e-minis were down 31 points, or 0.14 percent, with 25,273 contracts changing hands at 8:33 a.m. ET (1233 GMT).

S&P 500 e-minis were down 5.5 points, or 0.22 percent, with 189,217 contracts traded.

Nasdaq 100 e-minis were down 40.5 points, or 0.69 percent, on volume of 48,182 contracts.

Data showed that the U.S. economy accelerated in the second quarter as consumers ramped up spending and businesses invested more on equipment.

Gross domestic product increased at a 2.6 percent annual rate in the April-June period, up from 1.2 percent in the first quarter, the Commerce Department said in its advance estimate.

Starbucks fell 6.55 percent, while Mattel was down 5.16 percent after their quarterly reports.

Exxon was down 1.89 percent after the world`s largest publicly traded oil producer`s quarterly profit missed estimates.

Intel rose 1 percent after the chipmaker lifted its revenue forecast.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

By continuing to use the site, you agree to the use of cookies. You can find out more by clicking this link

Close