Futures pull back ahead of earnings; oil stocks jump

April 22, 2019

By Sruthi Shankar

(Reuters) – U.S. stock index futures dipped on Monday as investors returned from their Easter break and took a cautious stance at the beginning of what is expected to be the busiest week of the first-quarter earnings season.

The S&P 500 closed slightly lower last week, ending its three-week winning streak, but hovered about 1% away from a record high hit in September on U.S.-China trade hopes and a largely upbeat earnings season.

More than a third of the S&P 500 companies, including Boeing Co, Amazon.com Inc and Facebook Inc, will report this week determining whether investors should be concerned about the start of an earnings recession or whether back-to-back quarters of negative growth can be avoided.

S&P 500 profits are expected to drop 1.7% year-over-year, according to Refinitiv data in what could be the first earnings contraction since 2016.

Halliburton Co was up 3.8% in premarket trading after the oilfield services provider reported a surge in quarterly profit driven by a recovery in demand from its international customers.

Also helping was a surge in oil prices, with the United States set to announce a further clampdown on Iranian oil exports, tightening global supplies.

Exxon Mobil Corp was up 0.6% and Schlumberger NV gained 1.5%.

At 7:21 a.m. ET, Dow e-minis were down 60 points, or 0.23%. S&P 500 e-minis were down 7.75 points, or 0.27% and Nasdaq 100 e-minis were down 23.75 points, or 0.31%.

Boeing Co was down 1.2% following a New York Times report over the weekend that the company’s factory in South Carolina, which makes the 787 Dreamliner, has been plagued by shoddy production and weak oversight that have threatened to compromise safety. Another report on Sunday said the planemaker rejected the allegations.

Tesla Inc fell 2.4% after the electric car company said it has sent a team to investigate a video on Chinese social media which showed a parked Tesla Model S car exploding. Chinese rival Nio Inc’s shares were down 3.1%.

Pinterest Inc shares dipped 1.9% after closing up more than 30% in their market debut on Thursday. Brokerage Zephirin Group started coverage with a “sell” rating, citing a very competitive market for visual sharing.

(Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta)

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