Stock futures fall after major averages record two days of loss

Morgan Stanley's Chris Toomey Warns Earnings Will Be Bad Next Year

Equity futures have fallen as investors have had a tumultuous day with rising bond yields and broad corporate earnings.

Futures for the Nasdaq 100 fell 0.6%, while futures linked to the Dow Jones Industrial Average lost 36 points, or 0.1%. S&P 500 futures fell 0.3%.

The indices saw a second consecutive day of slides in regular trading, with the Dow losing 90.22 points, or 0.3%. The S&P 500 and Nasdaq Composite fell 0.8% and 0.6% respectively.

It was a day that started off on a better footing for the Dow, which reached close to 400 points at session highs, but rising Treasury rates being cut threw cold water on stocks. The yield on 10-year government bonds reached a high of 4.239%, a level not seen since 2008.

But even taking into account today’s losses, the key averages are still up more than 2% for the week – driven by rallies on Monday and Tuesday – and are on track for the best week since early September.

Corporate profits were a mixed bag. AT&T and IBM were among the stocks that rose after beating estimates. But Snap and Robert Half were among those who slipped after those companies published results that fell short of expectations.

Thursday’s trading fits into a broader picture of nervous investors making hasty decisions based on the day’s news, said Jamie Cox, managing partner of Harris Financial Group. He said investors are increasingly moving to shorter-term strategies as they see the Federal Reserve creating a volatile market as it tries to lower inflation through rate hikes.

“Markets look for any sign that the inflation data is moving in a way that the Fed can slow the pace of interest rates, and basically ignore speakers and governors, and basically ignore everything the Fed has to say,” Cox said.

“It lends itself to very, very choppy trading because people are happy and waiting for the signal that the break is coming,” he said. “It’s a bad course of action and it brings a lot of volatility.”

Investors will watch for earnings before Verizon’s bell as corporate reporting season continues.

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