Futures edge higher ahead of business activity data

[February 19, 2021]  By Devik Jain and Shreyashi Sanyal

(Reuters) - U.S. stock index futures edged higher on Friday, a day after Wall Street logged its biggest daily drop in nearly three weeks on a slide in technology-related firms, ahead of a reading on monthly U.S. business activity data.

American flags hang from the facade of the New York Stock Exchange (NYSE) building after the start of Thursday's trading session in Manhattan in New York City, New York, U.S., January 28, 2021. REUTERS/Mike Segar

The IHS Markit's flash reading on manufacturing and services PMIs, due at 0945 a.m ET (1445 GMT), is expected to show factory activity drifted lower in February.

The three major indexes slipped on Thursday weighed down by mega-cap technology companies such as Apple Inc, Tesla Inc and Facebook Inc, while data showed a fragile recovery in the labor market.

Strong earnings, progress in vaccination roll-outs and hopes of a $1.9 trillion federal stimulus package helped U.S. stock indexes hit record highs at the start of the week.

However, the Dow was nearly flat for the week, while the benchmark S&P 500 and the tech-heavy Nasdaq were tracking their first weekly loss this month.

Concerns over higher stock market valuations and a potential snag in inoculation efforts have led to fears of a short-term pullback in equities.

BofA expects a more than 10% pullback in stocks which are trading at more than 22 times 12-month forward earnings, the most expensive since the dotcom bubble of the late 1990s.

At 6:41 a.m. ET, Dow e-minis were up 38 points, or 0.12%, S&P 500 e-minis were up 8.25 points, or 0.21%, and Nasdaq 100 e-minis were up 45.75 points, or 0.34%.

Ride-hailing service Uber Technologies Inc fell 2.3% after Britain's Supreme Court ruled on Friday that a group of Uber drivers are entitled to worker rights such as the minimum wage.

Applied Materials Inc rose 5.1% after it forecast second-quarter revenue above market expectations, as demand for its semiconductor manufacturing tools picked up during a global shortage of semiconductors.

Video-streaming device maker Roku Inc added 3.8% after it reported quarterly revenue above market expectations, thanks to an influx of cord-cutting subscribers dropping their cable packages for streaming services.

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

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