Stock futures dip as Netflix weighs; Powell testimony eyed

[July 17, 2018]   By Amy Caren Daniel

(Reuters) - U.S. stock index futures fell on Tuesday as Netflix's weak subscriber numbers weighed on high-flying technology stocks and health insurer UnitedHealth Group's <UNH.N> results failed to impress investors.

The market is also awaiting Federal Reserve Chair Jerome Powell Congressional testimony where he is likely to comment on the impact of trade tensions and the state of U.S. economy.

Netflix's shares <NFLX.O> sank 13 percent in premarket trading on fears that its rapid expansion is slowing after the streaming video giant's quarterly subscriber growth missed estimates.

Shares of other streaming companies also fell, with Spotify <SPOT.N> down 2.3 percent and Twitter dropping 1.4 percent.

Amazon.com <AMZN.O> fell 0.8 percent after the world's largest online retailer suffered a glitch during its summer marketing event, Prime Day.

Netflix and Amazon weighed on the so-called FAANG group, with Facebook <FB.O>, Apple <AAPL.O> and Google-Parent Alphabet <GOOGL.O> down between 0.6 percent and 1.1 percent.

J&J <JNJ.N> topped quarterly profit estimates and its shares rose 0.6 percent, reversing course from a slide earlier, after the Dow component cut the top end of its full-year profit and sales forecasts.

While second-quarter earnings growth at S&P 500 companies are expected to have surged about 21 percent, traders and analysts are focusing more on company forecasts to gauge if the profit growth can be sustained, especially as the U.S.-China trade dispute escalates.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 6, 2018. REUTERS/Brendan McDermid

At 7:20 a.m. ET, Dow e-minis <1YMc1> were down 26 points, or 0.10 percent. S&P 500 e-minis <ESc1> were down 4 points, or 0.14 percent and Nasdaq 100 e-minis <NQc1> were down 12.75 points, or 0.17 percent.

Fed Chairman Powell's testimony on the economy and monetary policy before the U.S. Senate Banking Committee will be released at 10.00 a.m. ET and he will answer questions from the House of Representatives Financial Services Committee on Wednesday.

Powell is likely to reiterate the Fed's stance towards gradual monetary policy tightening. Markets will focus on his views on recent trade tensions.

"Trade tensions and fiscal policy are the two critical topics where Democrats will likely attack the Fed Chair and clarify whether the Federal Reserve has the necessary tools to avoid any disruption," Hussein Sayed, chief market strategist at FXTM, said in a note.

Economic data due at 9.15 a.m. includes a report that is expected to show industrial production rose 0.6 percent in June, after dipping 0.1 percent in May.

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

[© 2018 Thomson Reuters. All rights reserved.]

Copyright 2018 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.