By Investors Hub
The major U.S. index futures are pointing to a higher opening on Thursday, with stocks likely to regain ground following the sell-off seen in the previous session.
Bargain hunting may contribute to initial strength on Wall Street, with traders picking up stocks at reduced levels after the major averages ended Wednesday?s trading at multi-month closing lows.
A positive reaction to earnings news from big-name companies such as Microsoft (MSFT) and Twitter (TWTR) may also generate buying interest after disappointing earnings news weighed on the markets in the previous session.
Traders may be somewhat reluctant to get back into the markets following recent volatility, however, with lingering concerns about geopolitical tensions and global economic growth leading to continued uneasiness.
Following Tuesday?s attempted recovery from an early sell-off, stocks showed a substantial move back to the downside during trading on Wednesday. The Dow dropped to its lowest closing level in over three-months, while the Nasdaq and the S&P 500 tumbled to five-month closing lows.
The major averages saw further downside going into the close, ending the day just off their lows of the session. The Dow plunged 608.01 points or 2.4 percent to 24,583.42, the Nasdaq nosedived 329.14 points or 4.4 percent to 7,108.40 and the S&P 500 plummeted 84.59 points or 3.1 percent to 2,656.10.
The renewed selling pressure on Wall Street largely reflected another negative reaction to the latest batch of earnings news from several big-name companies.
Shares of AT&T (T) moved substantially lower after the telecom giant reported third quarter earnings that came in below analyst estimates.
Delivery giant UPS (UPS) also fell sharply after reporting third quarter earnings that matched estimates but weaker than expected revenues.
On the other hand, shares of Boeing (BA) moved to the upside after the aerospace giant reported better than expected third quarter results and raised its full-year guidance.
Negative sentiment was also generated by the release of a report from the Commerce Department showing a steep drop in new home sales in the month of September.
The report said new home sales plunged by 5.5 percent to an annual rate of 553,000 from the revised August rate of 585,000.
Economists had expected new home sales to edge down to a rate of 625,000 from the 629,000 originally reported for the previous month.
With the substantial decrease, new home sales fell to their lowest level since hitting a rate of 546,000 in December of 2016.
News explosive devices were sent to several prominent Democratic figures, including former President Barack Obama and Hillary Clinton, as well as CNN may also have led to some uneasiness on Wall Street.
Biotechnology stocks turned in some of the market’s worst performances on the day, dragging the NYSE Arca Biotechnology Index down by 7.2 percent to its lowest closing level in well over five months.
Within the biotech sector, Alexion Pharmaceuticals (ALXN) posted a steep loss despite reporting better than expected third quarter earnings and raising its full-year guidance.
Substantial weakness was also visible among semiconductor stocks, as reflected by the 6.6 percent slump by the Philadelphia Semiconductor Index. The index tumbled to its lowest closing level in a year.
Texas Instruments (TXN) led the semiconductor sector lower after the chipmaker reported weaker than expected third quarter revenues and provided disappointing fourth quarter guidance.
Energy stocks also saw considerable weakness despite an increase by the price of crude oil, moving notably lower along steel, software, and computer hardware stocks.
Meanwhile, interest rate-sensitive utilities stocks were among the few groups to buck the downtrend, resulting in a 2.3 percent jump by the Dow Jones Utility Average. The average reached a ten-month closing high.
