Futures dip as Turkey, trade tensions weigh

[August 15, 2018]   By Amy Caren Daniel

(Reuters) - U.S. stock index futures dropped on Wednesday, with investors weighing the impact of Turkey's currency crisis as well as the escalating tariff tensions between the United States and its trading partners.

While the lira continues to pull back from record lows against the dollar, Turkey doubled tariffs on some U.S. imports including alcohol, cars and tobacco in retaliation to U.S. moves.

Meanwhile, Beijing has lodged a complaint to the World Trade Organization to help determine the legality of U.S. tariff and subsidy policies.

In early premarket trading, 21 of the 25 most active stocks were in the red. A host of them were U.S.-listed shares of Chinese companies.

E-commerce giant Alibaba <BABA.N> fell 3.1 percent, JD.com <JD.O> dropped 6 percent and Baidu <BIDU.O> declined 2.8 percent.

Adding to the downbeat sentiment was a slide in oil prices due to a gloomier global economic outlook and a report of rising U.S. crude inventories, even as U.S. sanctions on Tehran threatened to curb Iranian crude oil supplies.

Shares of oil producers Exxon <XOM.N> and Chevron <CVX.N>, both members of the Dow Jones Industrial Average <.DJI>, slipped.

At 7:22 a.m. ET, Dow e-minis <1YMc1> were down 145 points, or 0.57 percent. S&P 500 e-minis <ESc1> were down 14.75 points, or 0.52 percent and Nasdaq 100 e-minis <NQc1> were down 53.75 points, or 0.72 percent.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 18, 2018. REUTERS/Brendan McDermid

Intel <INTC.O> slid 0.3 percent after disclosing three more possible flaws in some of its microprocessors.

Nvidia <NVDA.O> climbed 0.2 percent on a Wells Fargo double upgrade to "outperform".

Macy's <M.N> was up 1.6 percent ahead of its quarterly results later in the day. Retailers make up the majority of the S&P 500 companies yet to report results.

Of the 458 companies that have reported so far, 79 percent have beaten analysts' estimates, according to Thomson Reuters I/B/E/S.

Retail stock will continue to be in focus as a report at 8:30 a.m. ET is expected to show U.S. retail sales rose 0.1 percent in July, lower than a 0.5 percent increase in June.

Industrial production data at 9:15 a.m. ET is forecast increasing 0.3 percent in July, after it was up 0.6 percent in June, boosted by a sharp rebound in manufacturing and further gains in mining output.

(Reporting by Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur)

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