By Devik Jain and Shreyashi Sanyal
(Reuters) – The S&P 500 and the Dow index futures traded in a tight range on Thursday, ahead of data which will likely show another sharp contraction in the U.S. economy, while Nasdaq futures slipped following a decline in big-technology companies.
The U.S. economy is expected to have contracted at its sharpest pace since World War Two in 2020 as COVID-19 ravaged services businesses such as restaurants and airlines, while about 875,000 people likely filed jobless claims last week.
Concerns about slowing momentum in economic recovery due to rising coronavirus cases, heightened stock market valuations, and uneven distribution of vaccine rollouts have kept investors on edge about a pullback and increase in volatility in the near-term.
Earnings from mega-cap technology-related firms were mixed.
Apple Inc reported holiday-quarter sales and profit that beat Wall Street expectations, however, shares of the iPhone maker fell 1.8% premarket.
Facebook Inc dipped 0.6% as it warned Apple’s impending privacy changes could hurt revenue by interfering with ad targeting even after soundly beating quarterly revenue estimates.
Tesla Inc lost 4.4% after the electric-car maker reported disappointing fourth-quarter results and failed to provide a clear target for 2021 vehicle deliveries.
As amateur investors continued to pile into videogame retailer GameStop Corp, whose shares are now set to surge for a fifth straight session, investors are starting to question the sustainability of the rally and the impact it will have on markets when it ends.
“While I don’t think the surge in GameStop shares is a signal of euphoria in the broader stock market, the illumination of this trading environment may be the catalyst behind a near-term stock market correction,” said David Trainer, chief executive officer of New Constructs, an investment research firm.
At 7:22 a.m. ET, Dow e-minis were up 61 points, or 0.2%, S&P 500 e-minis were up 2 points, or 0.05%, and Nasdaq 100 e-minis were down 54 points, or 0.41%.
Southwest Airlines Co’s shares fell 0.2% after the airline posted its first annual loss since 1972 and said it was facing stalled demand in January and February on high levels of COVID-19 cases.
(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)
