Thursday September 10th

10-09-2020

Stock futures erase losses, turn positive as tech shares continue their rebound

U.S. stock index futures slipped early Thursday following a rebound that stopped a three-day skid. Futures for the Dow Jones Industrial Average implied an opening drop of about 50 points. Futures contracts for the S&P 500 lost 0.3%. Nasdaq 100 futures shed 0.2%. The move in futures follows a broad rally for the market on Wednesday, with the S&P 500 rising 2% for its best day since June. The Nasdaq Composite rose 2.7% to pull itself out of correction territory after a sell-off for major tech stocks drove a sharp sell-off in three straight sessions. Some of the stocks hardest hit during the recent slide saw more dramatic pops. Shares of Tesla, fresh off their worst day on record, rose nearly 11%. Tech giant Apple gained 4% to bring its market cap back to $2 trillion. In premarket trading Thursday, Tesla gained 1% and Apple was slightly higher. The three-day drop came amid increasing worry on Wall Street about a tech bubble, with major tech stocks fueling the Nasdaq Composite to record highs despite the hit to the economy from the coronavirus pandemic. Some said the pullback did not go far enough, with Duquesne Family Office CEO Stanley Druckenmiller telling CNBC on Wednesday morning that the market was in an “absolute raging mania.” Others pointed to reasons why the market could regain its footing once again. Liz Young, the director of market strategy for BNY Investment Management, said the investor cash still parked on the sidelines after the pandemic-induced sell-off in February and March should provide support for stocks. “People go to cash in droves — and it’s immediate, it’s a big wave. They come back in drips. So as it drips back in, that cash is going to look for more attractive valuation opportunities. So I think it’s natural that it would look for things that have been a little more beaten down or some of the stocks that haven’t driven us up to this point,” Young said on “Closing Bell.” “But I don’t think we’re in a place now where you have to start selling rallies and taking exposure off the table.” Investors will be greeted with new economic data on Thursday morning, including the Labor Department’s weekly jobless claims report. Economists surveyed by Dow Jones expect 850,000 new claims, down from 881,000 last week. Stocks in Asia-Pacific were mixed in Thursday trading, as shares in Indonesian and China markets fell. Hong Kong’s Hang Seng index closed 0.64% lower at 24,313.54. The Nikkei 225 in Japan rose 0.88% to close at 23,235.47 while the Topix index advanced 1.21% to end its trading day at 1,624.86. South Korea’s Kospi gained 0.87% to close at 2,396.48. Mainland Chinese stocks were lower in afternoon trading, with the Shanghai composite down 0.61% to about 3,234.82 while the Shenzhen component slid 0.924% to approximately 12,742.85. The Nasdaq-style ChiNext plunged 4.692% on the day to around 2,868.63. Oil prices slid on Thursday after data showed U.S. crude stockpiles unexpectedly rose last week, stoking concern about a sluggish recovery in fuel demand as coronavirus cases continue to surge in many countries. U.S. West Texas Intermediate crude futures fell 49 cents, or 1.3%, to $37.57 a barrel, after climbing 3.5% on Wednesday. Brent crude futures dropped 37 cents, or 0.96% to $40.39 a barrel, after rising 2.5% on Wednesday. Gold steadied near a one-week high on Thursday as the dollar weakened, but the metal traded in a narrow $8 range as investors held back from making large bets ahead of the European Central Bank’s monetary policy decision. Spot gold was little changed at $1,945.17 per ounce, after hitting its highest since Sept. 3 at $1,950.51 on Wednesday. U.S. gold futures dipped 0.1% to $1,952.40.