Futures Pointing to Mixed Open on Wall Street

March 11, 2019
wall street

By Investors Hub

The major U.S. index futures are pointing to a mixed opening on Monday following the pullback seen by the major averages last week.

A steep drop by shares of Boeing (BA) is likely to weigh on the Dow, as the aerospace giant is plunging by more than 10 percent in pre-market trading.

Boeing is under pressure following the crash of Ethiopian Airlines Flight 302, which is the second crash in five months involving the company?s 737 Max 8 model.

Meanwhile, the broader Nasdaq and S&P 500 may move to the upside following the release of a report from the Commerce Department showing an unexpected uptick in U.S. retail sales in January.

After an initial move to the downside, stocks staged a few recovery attempts over the course of the trading session on Friday. The major averages rallied going into the close of trading but still ended the day modestly lower.

The Dow edged down 22.99 points or 0.1 percent to 25,450.24, the Nasdaq dipped 13.32 points or 0.2 percent to 7,408.14 and the S&P 500 slipped 5.86 points or 0.2 percent to 2,743.07. With the drop, the major averages extended the pullback seen over the past few sessions.

For the week, the Dow and the S&P 500 both slumped by 2.2 percent, while the tech-heavy Nasdaq tumbled by 2.5 percent.

The initial weakness on Wall Street came after a report from the Labor Department revealed job growth nearly ground to a halt in February after soaring in January.

The Labor Department said non-farm payroll employment edged up by 20,000 jobs in February after jumping by an upwardly revised 311,000 jobs in January.

Economists had expected employment to increase by about 180,000 jobs compared to the spike of 304,000 jobs originally reported for the previous month.

The much weaker than expected job growth in February represented the worst month since the loss of 18,000 jobs in September of 2017, when employment was impacted by Hurricanes Harvey and Irma.

However, FTN Financial Chief Economist Chris Low said the stark contrast between the January and February data suggests a “seasonal adjustment breakdown rather than a change in economic performance.”

“The three month average, 186k, is respectable, and far more realistic than either the 311k rise in January or the 20k rise in February,” Low said.

The report also showed the unemployment rate dropped to 3.8 percent in February from 4.0 percent in January, while the annual rate of wage growth accelerated to 3.4 percent from 3.1 percent.

The jobs data largely overshadowed a separate report from the Commerce Department showing a substantial rebound in housing starts in January.

The report said housing starts soared by 18.6 percent to an annual rate of 1.230 million in January after plunging by 14.0 percent to a revised rate of 1.037 million in December.

Economists had expected housing starts to jump by 11 percent to a rate of 1.197 million from the 1.078 million originally reported for the previous month.

The Commerce Department said building permits also rose by 1.4 percent to an annual rate of 1.345 million in January after inching up by 0.3 percent to 1.326 million in December.

Building permits, an indicator of future housing demand, had been expected to drop by 2.8 percent to a rate of 1.289 million.

Concerns about the global economy also weighed on the markets after the European Central Bank downgraded its GDP forecasts and China reported weaker than expected trade data for February.

Energy stocks saw substantial weakness on the day amid a drop by the price of crude oil amid concerns about global demand.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 3 percent, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index tumbled by 2.6 percent and 2.2 percent, respectively.

Concerns about global demand also weighed on the steel sector, as reflected by the 1.7 percent slump by the NYSE Arca Steel Index.

Meanwhile, gold stocks moved sharply higher over the course of the session amid a jump by the price of the precious metal, with the NYSE Arca Gold Bugs Index spiking by 3.5 percent.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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