Will bull market continue under rate hike anticipation?
Verdence Capital Advisors director Megan Horneman weighs in on international market strength.
U.S. stock futures were lower Friday morning, putting the Dow Jones Industrial Average on track for a fifth day of losses.
Dow Jones Industrial Average futures fell 216 points, or 0.64%. S&P 500 futures and Nasdaq 100 futures slipped 0.03% and 0.28%, respectively.
The choppy session comes as the yield on the 10-year note slipped below 1.5% and was contending with its lowest levels since early March.
Growth stocks including Tesla Inc. and Square Inc., which typically benefit from lower interest rates, were not seeing their usual boost.
At the same time, bank stocks like Bank of America Corp. and JPMorgan Chase & Co were weaker as lower interest rates reduce their net interest margins.
Elsewhere, chipmakers including Nvidia Corp., Micron Technology Inc. and Intel Corp. were mixed after a bipartisan group of U.S. senators proposed a 25% tax credit for investments in semiconductor manufacturing. U.S. chip production has fallen sharply in recent years to 12% of global output, down from 37% in 1990.
In deals, container leasing and management company CAI International Inc. has agreed to be taken over by Japan’s Mitsubishi HC Capital Inc. for $1.1 billion, or $56 per share. The price represents a 47% premium to where shares closed on Thursday.
Online marketplace Ebay Inc. and Norway’s Adevinta were granted regulatory approval for the approximately $13 billion deal for the former’s classified ads business. EBay will receive $2.5 billion in cash and 540 million Adevinta shares.
In earnings, Adobe Inc. beat on both the top and bottom line as quarterly profit rose 23% year over year. The software maker forecast earnings for the current quarter that were ahead of expectations.
Gun-maker Smith & Wesson Brands Inc. reported sales soared 67% from a year ago to a record of almost $323 million. The company raised its quarterly dividend by 60% to 8 cents per share and announced a new $50 million share buyback program.
In commodities, West Texas Intermediate crude oil slid 39 cents to $70.65 a barrel and gold rallied $17.10 to $1,791.90 an ounce.
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Overseas markets were under pressure.
Britain’s FTSE 100 paced the decline in Europe, trading down 0.92%, while Germany’s DAX 30 and France’s CAC 40 fell 0.65% and 0.29%, respectively.
In Asia, Japan’s Nikkei 225 lost 0.19% and China’s Shanghai Composite slipped 0.01%. Hong Kong’s Hang Seng index outperformed, climbing 0.85%.
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