Drop in Facebook Shares Likely to Weigh on Nasdaq
By Investors Hub
The major U.S. index futures are pointing to a mixed opening on Thursday, as the Dow futures are up by 58 points but the Nasdaq futures are down by 53 points.
A notable decline by Facebook (FB) is likely to weigh on the Nasdaq after the social media giant reported better than expected second quarter earnings but weaker than expected revenues.
Stocks showed a strong move to the upside during trading on Wednesday, as traders reacted positively to a report about President Donald Trump securing concessions from Europe.
The major averages climbed to new highs for the session going into the close of trading. The Dow rose 172.16 points or 0.7 percent to 25,414.10, the Nasdaq jumped 91.47 points or 1.2 percent to 7,932.24 and the S&P 500 advanced 25.67 points or 0.9 percent to 2,846.07.
The strength on Wall Street came after a report from the Wall Street Journal said the European Union delegation meeting with Trump agreed to consider changes in its trade policies in an effort to ease relations with the U.S.
Citing a European official, the journal said European Commission President Jean-Claude Juncker and his top trade official Cecilia Malmström agreed to work with the U.S. administration to lower industrial tariffs on both sides, increase LNG exports and soy beans to Europe, and align regulatory standards to allow for medical devices to have better market access in Europe.
The report offset earlier negative sentiment generated by disappointing guidance from General Motors (GM) and Boeing (BA).
GM reported better than expected second quarter results but lowered its full-year earnings forecast due to rising steel and aluminum costs as a result of the tariffs imposed by President Donald Trump’s administration.
Aerospace giant Boeing also reported second quarter results that exceeded analyst estimates but warned of lower than expected margins for its defense business in 2018.
On the U.S. economic front, the Commerce Department released a report showing a bigger than expected pullback in new home sales in the month of June.
The report said new home sales plunged by 5.3 percent to an annual rate of 631,000 in June after jumping by 3.9 percent to a rate of 666,000 in May. Economists had expected new home sales to fall by 2.8 percent.