Stock futures back off on U.S.-China frictions; Intel sinks

[July 24, 2020]  By Medha Singh

(Reuters) - U.S. stock index futures fell on Friday following heightened tensions between the United States and China, and as Intel's shares slumped after reporting a delay in a developing new chip technology.

Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid

World stocks <.WORLD> also took a hit after Beijing ordered the Washington to close its consulate in the city of Chengdu, responding to a U.S. demand this week that China close its Houston consulate.

Intel Corp <INTC.O> fell 12% premarket after the company said it was six months behind schedule in developing 7-nanometer chip technology and it would consider farming out more work to outside semiconductor foundries.

Rival Advanced Micro Devices Inc <AMD.O> gained 6%.

The S&P 500 pulled back from a five-month high on Thursday, weighed down by losses in technology stocks, a surprise increase in U.S. jobless claims and Washington's tug-of-war over stimulus measures.

U.S. Senate Republicans will unveil their proposal next week for a fresh round of coronavirus aid, including more direct payments to Americans and a partial extension of enhanced unemployment benefits, Senate Majority Leader Mitch McConnell said on Thursday.

At 6:31 a.m. ET, Dow e-minis <1YMcv1> were down 27 points, or 0.1%, S&P 500 e-minis <EScv1> were down 4.75 points, or 0.15% and Nasdaq 100 e-minis <NQcv1> were down 70.5 points, or 0.67%.

FAANG group of stocks — Facebook Inc <FB.O>, Amazon.com Inc <AMZN.O>, Apple Inc <AAPL.O>, Netflix Inc <NFLX.O> and Google-parent Alphabet Inc <GOOGL.O> — which were pivotal in driving the stock market's recovery in recent months, slipped between 1.0% and 1.4% on Friday.

Of the 113 S&P 500 companies that have reported quarterly results, 77% of them have beaten dramatically lowered profit estimates, according to IBES Refinitiv data.

Investors will be keeping an eye on earnings reports from oilfield services provider Schlumberger NV <SLB.N>, credit card issuer American Express Co <AXP.N> and wireless carrier Verizon Communications <VZ.N>.

On the economic calendar, Markit manufacturing and services PMI surveys are due at 9:45 a.m. ET, while new home sales data is expected at 10 a.m. ET.

(Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)

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