Futures lower as tech stocks take a beating

[July 28, 2017]  By Tanya Agrawal

(Reuters) - U.S. stock index futures were lower on Friday as Amazon's profit miss took a toll on technology shares.

* Amazon's shares were down 2.96 percent in premarket trading after it reported a 77 percent drop in profit as its rapid and costly expansion into new shopping categories and countries showed no sign of slowing.

* The fall weighed on the tech index, which has been the best performing sector this year, leading the S&P 500's 10.6 percent run in 2017.

* Facebook, Google parent Alphabet  and Netflix, part of the high-flying "FANG" stocks, were also lower.

* The Dow Jones Transport Average, often seen as a gauge of the economy's health, closed down 3.1 percent on Thursday, dragged lower by a worrisome outlook from package delivery company United Parcel Service

* Still, the Dow industrials posted a record closing high, helped by strong quarterly earnings.

* The second-quarter earnings of the S&P 500 companies are expected to have risen 10.7 percent, compared with an 8 percent increase expected at the start of the month, according to Thomson Reuters I/B/E/S.

* Risk sentiment also took a hit following the failure of the Republicans to repeal Obamacare in a tight Senate vote overnight.

* Investors are worried about the ability of President Donald Trump to legislate his pro-growth agenda of tax reform and higher spending on infrastructure.

* Investors will be keeping an eye on the U.S Commerce Department's advance estimate of second-quarter gross domestic product, which is likely to have grown 2.6 percent, compared with a 1.4 percent rise in the previous quarter. The data is expected at 8:30 a.m. ET (1230 GMT).

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 19, 2017. REUTERS/Brendan McDermid

* Advanced core PCE prices for the second quarter are forecast to rise 0.8 percent from a 2.0 percent rise in the first quarter.

* Starbucks fell 5.7 percent after the world's biggest coffee chain reported a fall in net income.

* Merck  was up 1 percent after reporting a jump in quarterly profit.

* Chinese internet search engine provider Baidu rose 4.3 percent as quarterly profit jumped.

Futures snapshot at 7:03 a.m. ET:

* Dow e-minis were down 26 points, or 0.12 percent, with 21,082 contracts changing hands.

* S&P 500 e-minis were down 7.75 points, or 0.31 percent, with 153,177 contracts traded.

* Nasdaq 100 e-minis were down 46.5 points, or 0.79 percent, on volume of 37,100 contracts.

(Reporting by Tanya Agrawal in bengaluru; Editing by Anil D'Silva)

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