futures lower, on track for down week
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[May 16, 2014]
By Ryan Vlastelica
NEW YORK (Reuters)
U.S. stock index futures fell on Friday, indicating that
the Dow and S&P 500 could extend their decline to a
third day as investors continued to be wary of weakness
in small-cap names.
Small-cap stocks weighed on Wall Street on Thursday, as the Russell
2000 briefly hit correction territory before pulling back. Investors
were worried that prolonged weakness in small names could be a
precursor to broader losses.
The Dow and S&P 500 had their biggest daily decline in a month on
Thursday, and the S&P closed under its 50-day moving average for the
first time since April 15. In a sign of increased investor caution,
the CBOE volatility index had its biggest one-day bounce in a little
over a month on Thursday, and the spread between the spot VIX and
the 3-month VIX at one point tightened to its smallest since April
The Russell will continue to be in focus on Friday. While the index
is currently 9.3 percent away from its early March record of
1,208.65 - less than the 10 percent decline that marks a correction
- it has closed below its 200-day moving average in the past two
session, a sign of weakening momentum.
J.C. Penney Co jumped 19.5 percent to $10 in premarket trading a day
after posting an adjusted quarterly loss that was narrower than
expected and sales that were above forecasts. Nordstrom Inc <JWN.N>
also posted earnings above expectations.
S&P 500 futures fell 3.1 points and were below fair value, a formula
that evaluates pricing by taking into account interest rates,
dividends and time to expiration on the contract. Dow Jones
industrial average futures fell 34 points and Nasdaq 100 futures
lost 9.75 points.
Major indexes turned lower for the week in Thursday's decline. The
Dow is currently down 0.8 percent for the week while the S&P is off
0.4 percent and the Nasdaq is off 1.3 percent.
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In the tech space, Applied Materials reported revenue that was
slightly ahead of expectations, while Autodesk Inc raised its
full-year revenue view. Both results came out after the market
closed on Thursday.
Shares of Applied Materials rose 3 percent to $19.25 before the
Verizon Communications Inc rose 1.6 percent to $48.75 in premarket
trading a day after Warren Buffett's Berkshire Hathaway Inc unveiled
a new stake of 11 million shares in the company in a regulatory
filing. The filings also showed that prominent hedge fund managers
cut their exposure to high-profile Internet names like Netflix Inc
in the quarter.
(Editing by Bernadette Baum)
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