Tax, trade uncertainties give Wall Street jitters
October 30, 2018
Morgan Stanley: Selloff ‘Morphing’ Into Bear Market
October 30, 2018(For a live blog on the U.S. stock market, click or type LIVE/ in an Eikon news window)
* Trump says more tariffs ready if deal not possible
* Pfizer drops after lowering FY revenue forecast
* Coca-Cola climbs after beating sales estimates
* Futures up: Dow 0.39 pct, S&P 0.45 pct, Nasdaq 0.39 pct
By Shreyashi Sanyal
Oct 30 (Reuters) – U.S. stock index futures were higher on Tuesday, coming off yet another bout of volatile trading the previous session, as investors weighed the latest salvo in the U.S.-China trade war and earnings reports from blue-chip companies.
President Donald Trump said he believes “a great deal” on trade can be struck with China, and that he has billions of dollars worth of new tariffs ready if a deal isn’t possible.
The comments came after a Bloomberg report that Washington was preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between Trump and his Chinese counterpart Xi Jinping failed.
The report sparked a wild ride on Wall Street on Monday, with the blue-chip Dow Industrials falling more than 900 points from its high and the benchmark S&P 500 closing within a whisker of confirming correction territory.
“The futures are pointing to a bounce at the opening after yesterday’s swings, suggesting another similar session is in the making,” Peter Cardillo, chief market economist at Spartan Capital Securities LLC in New York, said in a client note.
“Nevertheless, we think we are getting very close to the end of the correction.”
Tariffs and rising costs have been among the factors that have led to a slew of disappointing forecasts from major industrials, chipmakers and other sectors, adding worries about slowing corporate growth to fears of faltering global growth.
Pfizer cut the upper end of its full-year revenue forecast, largely due to product shortages in the United States, sending its shares down 2.5 percent premarket.
Coca-Cola Co climbed 0.6 percent after beating quarterly sales estimates as more consumers reached for new versions of its sugar-free sodas and sparkling waters.
At 7:30 a.m. ET, Dow e-minis were up 96 points, or 0.39 percent. S&P 500 e-minis were up 12 points, or 0.45 percent and Nasdaq 100 e-minis were up 26.5 points, or 0.39 percent.
Although healthy S&P 500 results have pushed up third-quarter profit growth estimates to 25.3 percent from 21.8 percent in the past 11 days, according to Refinitiv data, concerns remain about the extent of a slowdown in earnings growth next year.
In a boost for the beleaguered chip industry, chip gear maker KLA-Tencor Corp rose 8.07 percent after strong results and forecast.
General Electric Co was up 1.9 percent, but sharply pared its gains after the industrial conglomerate slashed its quarterly dividend and said it was reorganizing its power unit into two businesses.
Akamai Technologies Inc jumped 10 percent after topping quarterly earnings estimate, helped by growth in its newer cloud security segment. (Reporting by Shreyashi Sanyal in Bengaluru)
