Stock Futures Swoon, Gold Rises; These 3 Footwear Names Stumble
Stock futures remained sharply lower Tuesday as a North Korean missile firing sent global stocks lower and, in the U.S., the shut down of Houston continued as Tropical Storm Harvey crept north into Louisiana.
Futures for the Dow Jones industrial average skidded 0.5% lower. S&P 500 futures dropped 0.7% and Nasdaq 100 futures tumbled 0.8%. Small caps traded in line with the general action, with Russell 200 futures trading not quite 0.7% below fair value.
Japan and South Korea went on high alert Tuesday, after North Korean lobbed a ballistic missile over the north Japanese island of Hokkaido, flying another 700 miles before crashing into the Pacific. The launch triggered warnings for Haokkaido residents to take shelter, and stirred outrage and condemnation among world leaders.
Tokyo’s Nikkei 225 ended 5% lower. Hong Kong’s Hang Seng index tumbled 0.4%, and currencies went into a frenzy of risk-off trade. Europe’s markets traded shrply lower near midday, with Frankfurt’s DAX down 1.7%, the CAC-40 in Paris off 1.2% and London’s FTSE 100 down 1.1%.
Harvey had moved out of the Gulf of Mexico and began to edge north, but continued to dump more than 1 inch per hour of rain on Houston Tuesday, according to the Houston Chronicle, which also reported power outages across the city with no access yet possible for utility repair crews.
Oil and gasoline futures traded mildly lower early Tuesday, as Texas refiners and oil producers remained hunkered down due to weather. About 2.2 million barrels per day of refining capcity is reported shut down from companies including Exxon Mobil (XOM), Royal Dutch Shell (RDSA), Valero (VLO) and Phillips 66 (PSX), while Marathon Petroleum (MPC) and Lyondell Basell (LYB) reported partial shutdowns.
A smaller portion of operations were closed in Texas’ Eagle Ford shale production area, with Bentek Energy reporting about 5% of expected output shut in early Tuesday.
Nike Hit By Foot Locker Warning, Best Buy Jumps On Q2 Results
Dow stocks traded almost unanimously lower. Nike (NKE) led the downside, dragged down 2.1% by a profit warning from retailer Finish Line (FINL). Finish Line — a non-Dow stock — collapsed 29% in premarket trade, after preliminary results guided Q2 EPS to half the number expected by consensus vie3ws, and following its a downgrade to neutral, from buy, by FBR Capital. Foot Locker (FL) also got caught in the downdraft,trading 3% lower ahead of the open.
Visa (V) also took one of the Dow’s hardest hits, down 1.2% and possibly hurt by the surge in the euro and the yen as investors responded to North Korea’s missile launch. Visa shares are up 33% since Dec. 30, and extended after a July rebound from 10-week support.
Apple (AAPL) dropped 0.8%. Google parent Alphabet (GOOGL) shed 1%, the worst loss among the FANG stocks. Apple continues to lag in its buy range, just above a 156.75 buy point in a cup base.
Best Buy (BBY) surged 5% after scoring a broad second-quarter win. Earnings and revenue growth cleared analyst targets by comfortable margins, and Q3 and full-year earnings and revenue guidance topped consensus views. The stock ended Monday at the top of it buy range, above a 59.79 buy point in a double-bottom base.
AutoDesk (ADSK) fell 6%. The computer aided design leader dropped 3% in strong trade Monday, giving back Friday’s breakout gain that followed the company’s second-quarter results. Tuesday’s premarket move implied an open below the stock’s 50-day moving average, a possible sell sign.
Gold traded up 0.8% to $ 1,325 an ounce in early action, after surging 1.% on Monday. Among gold mining stocks, Kinross Gold (KGC) and AngloGold Ashanti (AU) were up 4% each. Barrick (ABX) and Sibanye Gold (SBGL) each gained 2%.
The Case Shiller Housing Price Index for June is expected at 9 a.m. ET. The Conference Board’s August consumer confidence index is scheduled for a 10 a.m. ET release.
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