Wall Street to open lower as EU cuts economic growth forecasts

Wall Street was set to open lower on Thursday as fears of a global slowdown resurfaced after the European Union cut its economic growth forecasts, while a slew of dismal quarterly reports also added to woes. The European Commission said eurozone growth will slow to 1.3 per cent this year from 1.9 per cent in 2018, because of an expected slowdown in the largest countries of the bloc, partly due to global trade tensions.

"This is clearly raising concerns about global growth slowdown that we've been worrying about over the last several months and Europe is in the forefront of that," said Aaron Clark, portfolio manager at GW&K Investment Management. World stocks have been roiled by a trade war between the world's two largest economies since early 2018, but optimism that a potential trade deal could be reached before a March 2 deadline, when additional tariffs go into effect, has helped recent gains in the markets.

The next round of trade discussions will take place in Beijing in the coming week. The stellar run in stocks has pushed the S&P 500 up about 9 per cent this year, but on Wednesday the benchmark index's five-day rally snapped, hurt in part by downbeat revenue forecasts from videogame makers.

"There is still overhang from the U.S.-China trade talks and how that all plays out. If that just disappears overnight then we could push the markets to new highs," Clark said. At 8:39 a.m. ET, S&P 500 e-minis were down 0.6 per cent. Dow e-minis were down 0.53 per cent and Nasdaq 100 e-minis were down 0.67 per cent.

Tapestry Inc plunged 11 per cent before the bell after the handbag maker blamed falling tourist spending and a slowing global economy for a cut in its forecast for full-year adjusted profit. BB&T Corp rose 5.2 per cent on buying SunTrust Banks Inc for $28.24 billion in an all-stock deal, creating the sixth-largest U.S. bank based on assets and deposits. SunTrust shares jumped 10.8 per cent.

Twitter Inc dropped 7.3 per cent after the company forecast first-quarter revenue below Wall Street estimates and reported a drop in users for the fourth quarter. Cybersecurity firm FireEye Inc tumbled 12.3 per cent after forecasting a surprise loss for the current quarter, while larger rival Fortinet Inc rose 1.2 per cent after posting better-than-expected quarterly results. Overall, fourth-quarter earnings have been largely upbeat. Of the 282 S&P 500 companies that have reported, about 70 per cent have topped earnings estimates.