Dow Today – Wall Street to open flat as Delta variant weighs on recovery
By Shashank Nayar
(Reuters) – Wall Street was set for a subdued open on Tuesday as worries over the slowing pace of economic recovery overshadowed hopes that the Federal Reserve would maintain its accommodative stance a little longer after a soft U.S. payrolls report.
Microsoft Corp, Amazon.com Inc and Facebook Inc eased about 0.2% each in premarket trading, while Apple Inc and Google-owner Alphabet Inc were slightly higher. Markets were shut on Monday for the Labor Day holiday.
Halliburton Co, Occidental Petroleum Corp, Exxon Mobil Corp and Chevron Corp dropped between 0.5% and 0.8% after Saudi Arabia’s sharp cuts in crude contract prices for Asia sparked fears about slower demand and led to a drop in oil prices. [O/R]
“We are entering a time of the year where the market normally corrects and there is so much skepticism among investors that the market is climbing a wall of worry as the prevailing fundamental risks are not having any effect,” said Arthur Weise, chief investment officer at Kingsland Growth Advisors.
The Nasdaq hit a record high on Friday, while the other two main indexes posted small declines, reflecting mixed sentiment stemming from a disappointing U.S. jobs report.
Still, the S&P 500 and the Nasdaq are up 1.5% each since Aug. 27 following dovish commentary from Fed Chair Jerome Powell at the Jackson Hole Symposium where he again said that a stable job market was an essential goal for the central bank to start pulling back monetary support.
Easy central bank policies and re-opening optimism have pushed the benchmark indexes to multiple record highs over the past few weeks, but concerns over rising Delta coronavirus infections and its impact on the economic recovery could impede the rally.
“The spread of COVID continues to have an impact and we also have the end of extended employment benefits, factors that could possibly act as negative headwinds to the economy going ahead,” Weise said.
At 8:38 a.m. ET, Dow e-minis were up 15 points, or 0.04%, S&P 500 e-minis were up 1.75 points, or 0.04%, and Nasdaq 100 e-minis were up 7.5 points, or 0.05%.
Tracking a rise in yields on U.S. Treasury bonds, banks including Wells Fargo, Goldman Sachs, Citigroup and JP Morgan rose 0.4% each.
Boeing Co slipped 0.9% after Ireland’s Ryanair said it had ended talks with the planemaker over a purchase of 737 MAX 10 jets worth tens of billions of dollars due to differences over price. U.S.-listed shares of China’s JD.com rose 1.6% after the company said on Monday founder and Chief Executive Officer Richard Liu would switch his focus to the e-commerce giant’s long-term strategy. Match Group Inc shares jumped 9.3% after the S&P Dow Jones Indices said on Friday the Tinder parent will join the benchmark index, replacing Perrigo Company Plc.
Columbia Property Trust Inc surged 15.7% after Pacific Investment Management Company (PIMCO) said it would buy the company for $2.2 billion. [L4N2Q92J1]
(Reporting by Shashank Nayar in Bengaluru; Editing by Anil D’Silva)