Wall Street was wounded on Thursday as the Dow registered its worst one-day drop since May 17, breaking a four-session winning streak. The S&P 500 had its second-worst performance this year. The bleeding has stopped for the time being, however, as the Dow futures point to a slightly higher open for the industrial average. Meanwhile, the S&P 500 futures currently trade three points, or 0.1%, above fair value.
Coming into today's session, the S&P 500 holds a week-to-date loss of 0.5%. Five sectors are trading in the green for the week--real estate (+0.9%), utilities (+0.6%), consumer staples (+0.4%), materials (+0.3%), and technology (+0.1%)--while six are trading in the red--health care (-0.4%), financials (-0.4%), industrials (-0.8%), telecom services (-1.3%), consumer discretionary (-1.3%), and energy (-3.2%).
The energy sector has been the weakest group this week by far, extending its year-to-date loss to 18.0%. Crude oil has weighed heavily on the sector, dropping 3.5% through the first four sessions of the week. However, the commodity is trading modestly higher this morning, up 0.3% at $47.21/bbl.
U.S. Treasuries are slightly lower in early action with the benchmark 10-yr yield climbing one basis point to 2.19%. Meanwhile, the U.S. Dollar Index (93.47, -0.17) is lower by 0.2%.
Today's lone economic report--the preliminary reading of the University of Michigan Consumer Sentiment Index for August (Briefing.com consensus 94.0)--will be released at 10:00 ET. Next week's economic calendar is heavy on housing data, with the FHFA Housing Price Index due out on Tuesday, New Home Sales on Wednesday and Existing Home Sales on Thursday. Durable Goods data will be released next Friday.
In U.S. corporate news, Applied Materials (AMAT 45.45, +2.33) is higher by 5% after beating both top and bottom line estimates and raising its guidance. Deere (DE 117.80, -6.18) is also -5.0% after reporting better than expected earnings and worse than expected revenues.
In the retail sector, Foot Locker (FL 38.98, -8.72) is trading lower by 18% after reporting worse than expected earnings and revenues, with comparable same-store sales coming in well below guidance. Gap (GPS 23.93, +1.25) is up 6% after beating bottom-line estimates and raising its guidance while Ross Stores (ROST 59.00, +5.67) is +11% after reporting better than expected earnings and revenues.
There are 16 S&P 500 constituents on next week's earnings calendar, including Lowe's (LOW), HP (HPQ), Medtronic (MDT), Dollar Tree (DLTR), Broadcom (AVGO), Staples (SPLS) and Salesforce.com (CRM).
While the waters are calmer this morning, the potential for political/headline risk remains high as we head into the weekend.