U.S. Stocks May Give Back Ground On Disappointing Tech Earnings


Stocks may move to the downside in early trading on Thursday, giving back ground after trending higher over the past several sessions. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.

Technology stocks may lead an initial pullback on Wall Street amid a negative reaction to earnings news from companies like Netflix (NFLX) and Tesla (TSLA).

Shares of Netflix are tumbling by 6.5 percent in pre-market trading after the streaming giant reported better than expected second quarter earnings but weaker than expected revenues.

Electric car maker Tesla is also likely to come under pressure after reporting second quarter earnings and revenues that exceeded analyst estimates but a notable decrease in operating margins.

Shares of IBM Corp. (IBM) may also move to the downside after the tech giant reported second quarter earnings that beat expectations but revenues fell short.

On the other hand, shares of Johnson & Johnson (JNJ) may see initial strength after the healthcare giant reported better than expected second quarter earnings and raised its full-year guidance.

Early trading may also be impacted by reaction to a report from the Labor Department showing first-time claims for U.S. unemployment benefits unexpectedly dipped in the week ended July 15th.

The report said initial jobless claims slipped to 228,000, a decrease of 9,000 from the previous week’s unrevised level of 237,000. Economists had expected jobless claims to inch up to 242,000.

The Federal Reserve Bank of Philadelphia released a separate report showing a continued decline in Philadelphia-area manufacturing activity in the month of July,

Shortly after the start of trading, the National Association of Realtors is scheduled to release its report on existing home sales in the month of June.

Existing home sales are expected to decrease to an annual rate of 4.23 million in June from a rate of 4.30 million in May.

The Conference Board is also due to release its report on leading economic indicators in the month of June. The leading economic index is expected to fall by 0.6 percent in June after sliding by 0.7 percent in May.

Stocks fluctuated after an early move to the upside but largely managed to maintain a positive bias throughout much of the trading day on Wednesday. The major averages once again climbed to their highest closing levels in over a year.

The major averages all closed in positive territory, although the tech-heavy Nasdaq inched up just 4.38 points or less than a tenth of a percent to 14,358.02. The Dow climbed 109.28 points or 0.3 percent to 35,061.21 and the S&P 500 rose 10.74 points or 0.2 percent to 4,565.72.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index tumbled by 1.2 percent, while China’s Shanghai Composite Index slumped by 0.9 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the U.K.’s FTSE 100 Index has climbed by 0.6 percent, the French CAC 40 Index is up by 0.4 percent and the German DAX Index is up by 0.2 percent.

In commodities trading, crude oil futures are inching up $0.16 to $75.51 a barrel after falling $0.40 to $75.35 a barrel on Wednesday. Meanwhile, after closing unchanged at $1,980.80 an ounce in the previous session, gold futures are edging down $2.20 to $1,978.60 an ounce.

On the currency front, the U.S. dollar is trading at 139.87 yen versus the 139.65 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1179 compared to yesterday’s $1.201.

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