Stock Futures See-Saw After Budget Deal; Amazon News Pounds FedEx, UPS

Stock futures wrestled to remain positive through a whipsaw premarket session on Friday, as trade in Europe worsened and early enthusiasm following a federal budget agreement waned.

X Futures for the Dow Jones industrial average reversed brief losses and traded 0.8% above fair value, while S&P 500 futures pared a 1.2% gain to 0.9%. Nasdaq 100 futures were up 0.8%. The Russell 2000 small-cap gauge edged out of losses and into a fractional gain.

A pre-sunrise House vote in Washington, D.C., delivered a valid, two-year budget agreement to place on the president’s desk Friday, providing the possibility of a quick finish to the government shutdown that went into effect at midnight Thursday.

The dollar turned mixed, down against the euro and up vs. the yen. Bonds were off early lows, leaving the 10-year yield up at 2.83%. Commodities moved generally lower, with oil leading the declines. U.S. benchmark West Texas Intermediate traded down more than 1% and just above $ 60 per barrel.

Friday’s economic calendar is slim, showing only December wholesale inventory estimates from the Commerce Department at 10 a.m. ET.  Baker Hughes’ (BHGE) weekly rig count report, due for release at 1 p.m. ET, will be worth watching, however, as oil prices fight to hold the $ 60 mark.

GE Leads Dow; Nivida, FireEye Spike; FedEx, UPS Hammered

About two-thirds of the 30 Dow Jones industrial names traded higher ahead of Friday’s starting bell. General Electric (GE) jumped 1.3% to lead the index, fighting to turn the tide in a steep, four-week decline.

Apple (AAPL) gained strength, adding 0.7% and Amazon.com (AMZN) led the FANG stock tech leaders with a 1.4% advance. News reports revealed Amazon plans to launch a business delivery service, positioning the tech juggernaut to compete directly with FedEx (FDX) and United Parcel Service (UPS).

The Wall Street Journal reported Amazon would launch its SWA, Shipping With Amazon, service in Los Angeles over the next several weeks, then roll it out to additional markets. The company announced on Thursday plans for Amazon Prime home delivery of groceries from its recently purchased Whole Foods grocery chain.

Shares of FedEx and UPS dived more than 4% each in premarket trade.

Tesla (TSLA) bounced 1.2% ahead of the open, looking to claw back some of Thursday’s 8.6% loss. The iconoclastic innovator’s fourth-quarter results, released late Wednesday, left investors unimpressed. Shares start Friday back below their converged 10- and 40-week moving averages, still attempting to start up the right side of a possible five-month base pattern.

Chip stocks, which have acted as a recent bellwether for the market’s direction, were generally positive. Nvidia (NVDA) bolted 9.7% higher in premarket trade after the company turned in a big fourth-quarter revenue and earnings beat late Thursday. The IBD 50 stock’s shares had dropped more than 8% on Monday, stopping in a test of support at the stock’s 10-week moving average. Seesaw trading left shares down 6.9% for the week at Thursday’s close.

FireEye (FEYE) clocked an early 14% gain. After Thursday’s close, the security software leader reported a shift from loss to profit during its fourth quarter and ratcheted its first-quarter revenue outlook above consensus views. The stock has been fighting to regain its 50-day moving average, after cutting below that line in heavy trade on Monday. Shares are trading near their lows in a four-month consolidation.

Among the harshest early losses, Expedia (EXPE) toppled more than 15% as its late-Thursday report showed a wide fourth-quarter earnings miss and revenue also below analysts’ targets. The online booking heavyweight has been crawling along the bottom of a consolidation since Oct. 27, when it fell 16% following its third-quarter report.

Bitcoin Rebounds After Early Dive; Overstock Jumps

Bitcoin recovered from an early dive that took the price below $ 7,800 on Friday, and is now trading just below $ 8,300. That was about 3% below its high from Thursday and down less than 2% from a week earlier. Among Bitcoin-related stocks:

  • Riot Blockchain (RIOT): up 2.8%
  • Bitcoin Investment Trust (GBTC): up 4.7%
  • Mara Patent Group (MARA): unchanged
  • Overstock.com (OSTK): up 2.9%

Global Stock Markets: Europe Loses Ground, China Dives

Overseas markets saw some heavy selling but, in general, sellers appeared to be tapping the brakes. China’s markets suffered some of the heaviest losses, as the Shanghai Composite dumped 4.1% and Hong Kong’s Hang Seng lost 3.1%. Both indexes dropped more than 10% below recent highs and into corrections. In Japan, Tokyo’s Nikkei 225 fell 2.9%, leaving it above the low that followed its 4.7% dive on Tuesday. Tuesday’s loss drove the index into correction territory.

Friday’s selling began more moderately in Europe, but the leading benchmarks in Paris and Frankfurt had slumped to losses of more than 1% in afternoon trade. For the week, Frankfurt’s DAX was off 4.6%, London’s FTSE 100 had fallen 4% and the CAC-40 in Paris had a 4.5% loss. Only the DAX had fallen more than 10%.

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