Salem Radio Network News Saturday, February 4, 2023


Wall Street futures resume fall as economic worries weigh

(Reuters) – The Dow and S&P futures fell for the seventh time in eight sessions on Thursday as investors worried about a global downturn from aggressive rate hikes by central banks and weighed the risk of a potential contagion from a turmoil in UK markets.

Megacap growth names such as Inc, Apple Inc, Microsoft Corp, Meta Platforms Inc and Tesla Inc lost between 0.8% and 1.6% in premarket trading.

U.S. stocks ended sharply higher on Wednesday, as markets globally took heart from the Bank of England seeking to stabilize UK markets after a turmoil caused by the government’s new economic plan.

But calm from the BoE’s bond purchases promise proved short-lived with a rout in gilts spilling over into even safe-haven U.S. Treasuries and top-rated German bonds.

Wall Street’s main indexes have been battered this year, with surging U.S. bond yields further diminishing the appeal for stocks as investors found more attractive alternatives in U.S. Treasuries.

The yields on many Treasuries – which are considered virtually risk-free if held to maturity – now dwarf the S&P 500’s dividend yield, which recently stood at about 1.8%, according to Refinitiv Datastream.

At 5:15 a.m. ET, Dow e-minis were down 225 points, or 0.76%, S&P 500 e-minis were down 31.25 points, or 0.84%, and Nasdaq 100 e-minis were down 117.75 points, or 1.02%.

American Airlines fell about 2.4% as carriers canceled almost 2,000 U.S. flights for Thursday after Hurricane Ian hit Florida’s Gulf Coast with catastrophic force in one of most powerful U.S. storms in recent years.

U.S. cruise companies Norwegian Cruise Line Holdings Ltd and Carnival Corp fell about 2.5% each after they delayed or canceled trips in anticipation of the hurricane.

Investors will be watching for weekly jobless claims, which is expected to rise by 2,000 to 215,000 last week. Final economic growth figures for the second quarter are also due. A second estimate of the government last month had shown the economy contracted at 0.6%, a more moderate pace than initially thought.

(Reporting by Susan Mathew in Bengaluru; Editing by Anil D’Silva)


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