Market Snapshot: U.S. stock futures wobble as bond yields rise; GE higher after earnings


U.S. stock futures were struggling for direction on Friday, but headed for a weekly win, as investors kept an eye on rising government bond yields and focused on a fresh batch of earnings.

Corporate results have largely come in ahead of expectations thus far, with General Electric beating estimates early in the session; however, others haven’t produced the kind of blowout results seen necessary to send stocks higher from elevated levels, and disappointments have been punished, highlighted by Philip Morris International Inc.’s weaker-than-expected results on Thursday, which triggered broader losses on Wall Street.

What are the main benchmarks doing?

Dow Jones Industrial Average futures YMM8, -0.04% slipped 12 points, or less than 0.1%, to 24,627, while S&P 500 futures ESM8, +0.07% added 1.65 points, or less than 0.1%, to 2,694.75. Nasdaq-100 futures NQM8, -0.04% edged 4.75 points, or less than 0.1%, lower at 6,775.25.

Declines in the consumer staples, real estate and technology groups dragged stocks down Thursday. The Dow DJIA, -0.34% closed 0.3% lower at 24,664.89 and moved back into negative territory for the year. The S&P 500 SPX, -0.57% and the Nasdaq Composite COMP, -0.78% finished with losses of 0.6% and 0.8%, respectively.

For the week, the Nasdaq is ahead with a gain of around 2%, while the Dow and S&P 500 are set to rise 1.4% and 1.3%, respectively, as of Thursday’s close.

What’s driving markets?

More earnings releases are on the docket Friday, which should be a factor in driving direction, though the reporting season will pick up in earnest with big-name updates next week.

Tech stocks may be in line for another day of weakness, after Asian chip names fell on Thursday’s downbeat outlook by Taiwan Semiconductor 2330, -6.34% 2330, -6.34% Taiwan Semi shares fell 6%, for their worst day since 2013. Apple Inc. AAPL, -2.83%  shares shed 2.8% Thursday on those concerns.

Investors will likely keep an eye on the 10- year Treasury note yield TMUBMUSD10Y, +0.16% which shot up to 2.930% on Thursday, the highest since Feb. 23, on rising inflation expectations. The yield was up 1 basis point to 2.92% on Friday.

There is no top-tier economic data for release in the session. But Chicago Fed President Charles Evans will give a speech on current economic conditions and monetary policy to the Graaskamp Center Spring Board Conference at 9:40 a.m. Eastern Time.

Oil prices shifted lower after President Donald Trump tweeted that high crude prices “will not be accepted.” That came as a meeting of ministers from the Organization of the Petroleum Exporting Countries group and the non-OPEC countries reaffirmed a commitment to keep output limited, in a Saudi Arabia gathering. Crude-oil futures CLK8, -0.85%  fell 49 cents, or 0.8%, to $67.80 a barrel.

Read: Watch for ‘violent selloff’ to thwart Saudis’ wish for $100 oil

What are strategists saying?

“We think it’s the back up in rates that is causing some second thoughts, in spite of good earnings so far. The market seems to be headed for sector rotation as the commodities rally. GE and HON are among the earnings investors will be in focus today. Bottom Line: A downward narrow trading range is likely to unfold,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

What stocks are in focus?

GE GE, +2.42%  shares rose 3% in premarket after reported adjusted earnings ahead of Wall Street forecasts, and reaffirmed its guidance. Honeywell International Inc. HON, -0.83%  rose 2.6% in premarket after first-quarter results.

Schlumberger Ltd. SLB, -0.09%  fell 1.1% in premarket. The oil giant topped earnings estimates, but said it expects the sector to see supply challenges this year.

Atlassian Corp. PLC TEAM, +0.32%  shares fell 12% in premarket trading after the software maker reported earnings late Thursday.

SunTrust Banks Inc STI, +2.48% STI, +2.48% posted a profit rise, with shares up modestly in premarket. State Street Corp. STT, +2.72% STT, +2.72% earnings are still ahead.

Twitter Inc. TWTR, +0.00%  shares rose 3% in premarket after MKM Partners lifted shares to buy from neutral.

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Pivotal Software Inc. PVTL, +0.00%  priced its initial public offering at $15 a share for shares that will begin trading on the New York Stock Exchange on Friday. The cloud-software company is majority controlled by Dell Technologies Inc. and VMware Inc. VMW, -1.42%

See: Pivotal IPO—5 things to know about the cloud software company

What are other markets doing?

European stocks SXXP, -0.11% shook off earlier losses to move higher. Asian markets CLK8, -0.85% finished lower, as chip-related stocks got hit.

Gold futures GCM8, -0.47% were moving south, while the ICE U.S. Dollar Index DXY, +0.27% climbed to an 11-day high, boosted partially by richer Treasury yields. The U.K. pound GBPUSD, -0.1988%  fell after Bank of England Gov. Mark Carney dampened expectations for an interest-rate hike in May.