Futures dip as earnings reports disappoint; Fed awaited

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[May 03, 2017]  By Tanya Agrawal

(Reuters) -
U.S. stock index futures were lower on Wednesday after downbeat earnings reports from companies, including index-heavyweight Apple.

* Shares of Apple dropped 1.8 percent to $144.89 in premarket trading, a day after the company reported a surprise fall in iPhone sales and forecast current-quarter revenue below estimates.

* Akamai Technologies tumbled 15 pct after it gave a weak forecast for current-quarter revenue and profit. Gilead dropped nearly 2 percent after the drugmaker reported a lower-than-expected profit.

* Strong corporate reports so far had resulted in estimates for first-quarter profit growth at S&P 500 companies increasing to 13.9 percent as of Tuesday, from an estimate of 10.4 percent growth two weeks back, according to Thomson Reuters I/B/E/S.

* The strong earnings have also helped offset some fears about geopolitical tensions in the Korean peninsula, the lack of progress by the Trump administration in enacting its economic agenda as well as mixed economic data.

* Data last week showed the U.S. economy grew at its slowest pace in three years in the first quarter. Since then automakers have reported a drop in vehicle dales for March, which along with the drop in iPhone sales, have added to nerves.

* The Federal Reserve could address GDP when it issues a statement at 2 p.m. ET (1800 GMT), at the end of its two-day meeting on interest rates. While the central bank is expected to hold interest rates steady, it may hint it is on track for an increase in June.

* Economic data due Wednesday includes ADP's jobs numbers, which is expected to show U.S. companies added 175,000 workers in April, less than the 263,000 its added in March. The report, due at 8:15 a.m. ET, comes ahead of Friday's non-farm payrolls number for April.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 1, 2017. REUTERS/Brendan McDermid

* Separately, the Institute for Supply Management is likely to report that its non-manufacturing index increased to 55.8 in April from 55.2 in March.

* Twilio tumbled 32.2 percent to $23.01 after the cloud-based communication software maker's revenue forecast came in below estimates.

* Weight Watchers jumped 13.7 percent to $24.10 as the weight management company raised its profit forecast.

* Facebook, Tesla, AIG  and Metlife are scheduled to report after the close of market.

Futures snapshot at 6:53 a.m. ET:

* Dow e-minis were down 17 points, or 0.08 percent, with 8,709 contracts changing hands.

* S&P 500 e-minis  were down 3.25 points, or 0.14 percent, with 53,280 contracts traded.

* Nasdaq 100 e-minis were down 15.75 points, or 0.28 percent, on volume of 14,117 contracts.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza)

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