US STOCKS-Wall St set for muted open as investors await earnings

Wall Street dips ahead of big bank earnings
April 11, 2019
What Bond Yields Under Pressure Could Mean for the Market
April 15, 2019

US STOCKS-Wall St set for muted open as investors await earnings

(For a live blog on the U.S. stock market, click or type LIVE/ in a news window.)

* U.S. Steel falls after BofA Merrill downgrade

* Tesla hit by report of freezing investment in Gigafactory

* U.S. producer prices post biggest rise in 5 months

* Futures up: Dow 0.11%, S&P 0.10%, Nasdaq 0.04% (Adds comments, updates prices)

By Sruthi Shankar

April 11 (Reuters) – Wall Street’s main indexes were on track for a subdued open on Thursday, as investors assessed warnings from major central banks about a global slowdown and looked ahead to the start of the corporate earnings season.

Profit forecasts for the first quarter have dropped steadily in the last six months, with S&P 500 earnings now seen falling 2.5%, which would mark the first year-on-year contraction since 2016, according to Refinitiv data.

“We can’t seem to really break out to new record highs but we’re not falling either and I think earnings will be a key factor in deciding it,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Earnings season begins in earnest on Friday when JPMorgan Chase & Co and Wells Fargo & Co report quarterly results.

Minutes from the Federal Reserve’s March meeting on Wednesday showed that it was likely to leave interest rates unchanged this year given risks to the U.S. economy from the slowdown and uncertainty over trade policies and financial conditions.

The European Central Bank also maintained its loose policy stance, raising the prospect of more support being pumped into the struggling euro zone economy.

Concerns about trade and financial conditions have pushed central banks to take a dovish stance, broadly supporting appetite for risk assets.

“The market is relieved about the Fed not acting on interest rates and is now looking forward to the earnings season which is not going to be a good one in comparison,” Cardillo added.

At 8:39 a.m. ET, Dow e-minis were up 30 points, or 0.11%. S&P 500 e-minis were up 2.75 points, or 0.1% and Nasdaq 100 e-minis were up 3 points, or 0.04%.

Investors are hopeful that a trade deal with China and a better-than-feared quarterly earnings season will help Wall Street extend its strong start to the year.

U.S. Treasury Secretary Steven Mnuchin said on Wednesday that trade talks continued to make progress and both sides have largely agreed on a mechanism to police any trade agreement they reach, including establishing new “enforcement offices”.

Investors also shrugged off tame inflation data, after a Labor Department report showed U.S. producer prices increased by the most in five months in March.

Bed Bath & Beyond Inc shares tumbled 11.9% after the home furnishing retailer forecast weak current-quarter profit.

Tesla Inc shares fell 3.4% after the Nikkei reported the electric carmaker and Panasonic Corp were rethinking plans to expand the capacity of Gigafactory 1. Panasonic said it was studying further investments.

United States Steel Corp was down 3.2% after Bank of America Merrill double downgraded the stock to “underperform”. (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Anil D’Silva)