Categories: world

Dow futures falls about 350 points as China rally stumbles

Stock futures pointed to a punishing session Tuesday, a two-day rally for China's stock market began to unravel, reviving questions…

Stock futures pointed to a punishing session Tuesday, a two-day rally for China’s stock market began to unravel, reviving questions about economic growth in the second largest economy and the implications for the U.S.

Investors were also braced for a heavy deluge or earnings from major companies such as Caterpillar Inc., and McDonald’s.

How are major indexes trading?

Dow Jones Industrial Average Futures

YMZ8, -1.32%

fell 352 points, or 1.4%, to 24.941, while S & P 500 futures

ESZ8, -1.46%

fell 41.75 points, or 1.5%, to 2.715.25. Nasdaq-100 futures

NQZ8, -1.71%

wear 127 points, or 1.8%, to 7.033.

DJIA, -0.50%

On Monday, Dow industrials

DJIA, -0.50%

dropped 126.93 points, or 0.5%, two end at 25.317.41, while the S & P 500

SPX, -0.43%

shed 0.4%, to close at 2,755.88. The Nasdaq Composite Index

COMP, + 0.26%

managed a 0.3% gain, to finish at 7.468.63.

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What’s driving the markets

More than 150 companies are on tap to announce financial results this week. Investors are pinning hopes that stock markets will find fresh impetus to move higher through those results.

But jittery investors were looking around at risk piling up, with China in the spotlight as the Shanghai Composite Index

SHCOMP, -2.26%

gift back part of a two-day rally, falling 2.3%. Det er som regeringsembedsmænd har tilbragt de sidste par dagene, og forsøger at fortryre markedet med verbal oppmuntring for investorer.

U.S. -China trade tensions are also a lingering factor for investors. On Monday, came news that two U.S. Navy warships sailed through the Taiwan Strait on Monday, but were shadowed closely by Chinese warships.

Elsewhere, Italy’s budget plan is expected to be told to revise its budget at the European Commission on Tuesday, as the back-and-forth continues between the country’s anti-establishment government and Brussels.

Aside from earnings, investors continue to worry about how higher interest rates could impact the economy, as the Federal Reserve has indicated a move to tighten up monetary policy by year’s end.

What are analysts saying?

“Nerves ahead of a slew of corporate earnings reports in these weeks from names such as Amazon and Economic Bell Caterpillar. In addition to rising geopolitical tensions meant that investors are still not prepared to put risk fully back on the table,” said Jasper Lawler, head of research at London Capital Group, in a note to clients.

Which stocks are in focus

A number of Dow components were set to report results. Shares of Caterpillar Inc.

CAT, -1.99%

were declining 1.8% in premarket trade Tuesday, with the industrial giant on track to report its quarterly results.

McDonald’s Corp. shares

MCD, -0.51%

were also inching lower, down 0.5%, in premarket action ahead of its earnings report. United Technologies Corp. .

UTX, -1.77%

was not trading in premarket but those for Verizon Communications Inc .

VZ, + 0.15%

were down 1.2% if those blue chips were set to release earnings. 3M Co.

MMM, + 0.76%

stock traded 0.7% lower.

Also on the earnings docket were Biogen Inc .

BIIB, -1.52%

and Harley-Davidson Inc .

HOG, -2.12%

as well as Lockheed Martin Corp. .

LMT, -0.41%

What are other markets doing?

Losses were not just felt in China, as the Nikkei 225 index

NIK, -2.67%

tumbled 2.7% and the Hong Kong’s Hang Seng Index

HSI, -3.08%

dropped 3.1%. European stock futures also were trading sharply lower.

If investors backed away from perceived riskier assets such as stocks, they sought a haven in the Japanese yen

USDJPY, -0.52%

which was up around 0.6% against the dollar to ¥ 112.18. Gold prices

GCZ8, + 1.12%

also jumped, while oil futures



And the yield on the 10-year Treasury note

TMUBMUSD10Y, -1.51%

fell to 3.15%. Yields move inversely to prices.

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