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S&P energy sector down 4.85 per cent can come under more pressure

This gave investors a reason to keep away from risky assets, with worries about rising interest rates and the effects of the U.S.-China trade war taking the shine off a decade-long bull run for U.S. stocks this year.


Devdiscourse News Desk Last Updated at 09-11-2018 18:25:51 IST United States
S&P energy sector down 4.85 per cent can come under more pressure
  • At 7:18 a.m. ET, Dow e-minis was down 128 points, or 0.49 per cent. S&P 500 e-minis was down 15.25 points, or 0.54 per cent and Nasdaq 100 e-minis were down 59 points, or 0.82 per cent. (Image Credit: Twitter)

U.S. stock index futures fell on Friday, as a batch of weak Chinese data raised concerns about global growth a day after the Federal Reserve hinted at the gradual tightening of borrowing costs.

This gave investors a reason to keep away from risky assets, with worries about rising interest rates and the effects of the U.S.-China trade war taking the shine off a decade-long bull run for U.S. stocks this year.

The S&P energy sector, which is down 4.85 per cent this year and is lagging the broader S&P 500 index, could come under more pressure as U.S. crude price continues to lose ground.

It has fallen more than 20 per cent from its Oct.3 high, confirming a bear market as investors focused on swelling global crude supply.

Shares of copper miner Freeport McMoran Inc dropped 2.8 per cent in premarket trading as the price of the metal, considered an economic bellwether, hit a one-week low.

Trade-sensitive stocks such as Boeing Co and Caterpillar Inc fell more than 1 per cent.

"Worries about trade war and how the slowdown in China will impact the rest of the world mean stocks appear to be riskier, so there's a typical risk-off move in markets today," said DZ Bank rates strategist Pascal Segesser.

Despite the worries, the main U.S. stock indexes are on track to post strong weekly gains as the midterm elections on Tuesday offered relief to investors, with the results coming in largely as anticipated.

The Fed, as expected, left interest rates unchanged following a two-day meeting on Thursday. Their policy statement signalled more rate hikes on the way with the next one expected in December, their fourth this year.

Some traders had speculated the Fed may tone down its rhetoric to calm financial markets that were roiled in October, partly on worries about rising interest rates.

At 7:18 a.m. ET, Dow e-minis was down 128 points, or 0.49 per cent. S&P 500 e-minis was down 15.25 points, or 0.54 per cent and Nasdaq 100 e-minis were down 59 points, or 0.82 per cent.

General Electric fell 2.9 per cent after J.P. Morgan cut price target on the stock to $6 from $10.

Activision Blizzard Inc fell 11.2 per cent after the video game publisher forecast fourth-quarter earnings below analysts' estimates.

Skyworks Solutions Inc also fell 7.3 per cent after the analogue chipmaker provided a weak first-quarter forecast, raising concerns of slowing demand for premium smartphones.

Among the few bright spots, Walt Disney Co, a member of the Dow Jones Industrial Average, rose 1.6 per cent after the media company reported better-than-expected results as its theme parks and Marvel movie "Ant-Man and the Wasp" attracted crowd.

(With inputs from agencies.)


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