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 Tech-heavy Nasdaq futures fell more than 1 percent, dragged
down by disappointing results.
Dow component Apple's shares were down 8 percent at $95.97 in
premarket trading, while Twitter slumped 14.8 percent to $15.12
after its revenue missed expectations.
"That kind of miss is going to make people question if the corporate
earnings as a whole is as strong as they think they are. I think
it's going to rattle confidence," said Brad McMillan, chief
investment officer for Commonwealth Financial in Waltham,
Massachusetts.
S&P 500 e-minis were down 5 points, or 0.24 percent, with
149,285 contracts traded at 8:31 a.m. ET. Nasdaq 100 e-minis
were down 47.25 points, or 1.06 percent, on volume of 27,352
contracts. Dow e-minis were down 38 points, or 0.21 percent, with
23,357 contracts changing hands.
Investors are awaiting a Fed decision on rates at 2 p.m. ET. No
change in rates is expected but the Fed may signal its intention to
tighten policy this year.
Economists polled by Reuters expect two increases this year but
futures prices show traders do not expect rates to rise until late
2016, according to CME Group's FedWatch.
"I don't think the Fed is going to raise rates today but they are
starting to lean toward the possibility of a hike and are going to
buy themselves some insurance by saying that June is more possible
than a lot of people ... think," McMillan said.
The Fed next meets on June 14-15. While the labor market continues
to gain strength, inflation remains below the central bank's 2
percent target and mixed economic data could cloud the path to
future rate hikes.
Oil hit its highest level this year on Wednesday, driven by a
falling dollar and evidence of declining U.S. supply, putting the
price on course for its strongest monthly performance since last
April. [O/R]
Disappointing earnings have slowed down a recent rally but the S&P
continues to hold near the record high it set almost a year ago. The
index has rallied 15 percent since February.
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First-quarter earnings from S&P 500 components are expected to have
fallen 7.1 percent from a year earlier, according to Thomson Reuters
I/B/E/S. Of the 166 companies that have reported, 59 percent
reported revenue above analyst expectations, just short of the
average 60 percent since 2002.
Apple suppliers Skyworks, Cirrus Logic and Broadcom were down
between 3 percent and 5.4 percent.
Facebook <FB.O> and PayPal are scheduled to report results after the
close of market.
DreamWorks Animation soared 19 percent to $32.27 after the Wall
Street Journal reported Comcast is in talks to buy the
Hollywood studio owner. Comcast was up 1.7 percent at $62.10.
Ebay was up 1.3 percent at $24.80 after raising its full-year
revenue forecast, while Boeing fell 0.9 percent to $132 after
a drop in quarterly profit.
Chipotle was down 4.7 percent at $425.01 after a
bigger-than-expected drop in quarterly comparable sales prompted a
spate of price target cuts.
(Reporting by Tanya Agrawal; Editing by Don Sebastian)
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