Futures dip as trade worries resurface

[September 24, 2018]   By Shreyashi Sanyal

(Reuters) - U.S. stock index futures dropped on Monday as the latest round of Sino-U.S. tariffs kicked in, with neither showing signs of backing down from a protracted trade war.

The markets could be volatile and trading volumes higher as the S&P 500 sector shuffle takes effect, with the telecoms being folded into a new communications services index that will now include heavy-hitting technology stocks such as Facebook Inc <FB.O>, Twitter <TWTR.N> and Alphabet <GOOGL.O>.

Shares of the three companies fell between 0.5 and 1 percent in premarket trading, also on renewed fears of higher regulation after a report that the White House has drafted a preliminary order to direct federal agencies to probe the business practices of social media and internet firms.

U.S. tariffs on some $200 billion worth of Chinese goods took effect on Monday, along with Beijing's retaliatory duties on $60 billion worth of U.S. products, which pressured trade-sensitive stocks.

Boeing <BA.N>, the biggest U.S. exporter to China, dropped 0.5 percent and Caterpillar <CAT.N> 0.3 percent, leading the losers on the Dow Industrials <.DJI> before the bell.

The benchmark S&P 500 <.SPX> and the blue-chip Dow have fared better than the Nasdaq <.IXIC> of late as the latest list of Chinese goods subject to tariffs include many technology products.

While the China market is closed for the Mid-Autumn Festival, U.S.-listed shares of Chinese firms fell. Alibaba <BABA.N> was down 1.5 percent and Baidu <BIDO.O> 1.6 percent. JD.com <JD.O>, whose founder faces rape allegations, was last down 3.9 percent.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 20, 2018. REUTERS/Brendan McDermid

At 7:39 a.m. ET, Dow e-minis <1YMc1> were down 35 points, or 0.13 percent. S&P 500 e-minis <ESc1> were down 4.75 points, or 0.16 percent and Nasdaq 100 e-minis <NQc1> were down 33 points, or 0.44 percent.

Shares of energy companies rose as oil prices jumped more than 2 percent to a four-year high after OPEC declined to announce an immediate increase in production despite calls by President Donald Trump to raise global supply.

Exxon Mobil <XOM.N> gained 0.6 percent and Chevron <CVX.N> 0.7 percent, making them the second- and the third-biggest gainers among Dow components. The biggest was Walt Disney's <DIS.N> 1.1 percent gain.

Comcast <CMCSA.O> fell 4.4 percent after it won an auction for Britain's Sky Plc <SKYB.L>, ending a battle with Twenty-First Century Fox <FOXA.O> and Disney. Fox rose 0.8 percent.

Pandora Media <P.N> jumped 8.6 percent after satellite radio provider Sirius XM Holdings <SIRI.O> said it would buy the music streaming service in an all-stock deal valued at about $3.5 billion. Sirius fell 3.3 percent.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva)

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