Dow futures edge higher after data, but China economy struggles

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MARKET SNAPSHOT

U.S. stock-index futures turned slightly higher on Wednesday, as investors parsed economic data. However, fresh reports out of China revealed the world’s second-largest economy’s struggles with the viral pandemic.

How are stock futures trading?

  • Dow Jones Industrial Average futures rose 21 points to 34,485, or less than 0.1%.
  • S&P 500 futures rose 7 points to 4,441, a rise of 0.2%.
  • Nasdaq-100 futures gained 30 points, or 0.2%, to 15,410

On Tuesday, the Dow industrials dropped 292.06 points, or 0.8%, to finish at 34,577.57, the S&P 500 index fell 25.68 points, or 0.6%, to 4,443.05 and the Nasdaq Composite fell 67.82 points, or 0.5%, to 15,037.76.

Read: Stock-market traders brace for ‘quadruple witching’

And: The S&P 500 fights to hold above a short-term line in the sand of bullish momentum

What’s driving the market?

Stocks were trading near the flatline on Wednesday as investors remain uneasy about the fallout from the COVID pandemic, which is threatening to slow global economic growth, as the delta variant has fueled surging cases in the U.S. and other countries. Markets have been trying to regroup after a string of losses that were briefly halted on Monday.

The Dow and S&P 500 have lost ground for six of the last seven days and the Nasdaq has posted five straight days of losses. For September, the Dow is off by more than 2% and the S&P 500 is down about 1.8%.

Read: Shop early and expect to pay more: Supply chain issues could be a stumbling block to upbeat holiday shopping forecasts

“I suspect the market is likely to bounce around as it tries to stabilize. From a near term prospective the market is somewhat oversold, therefore we could get a bounce. However the cautious attitude will likely prevail since the decline has been accompanied by low volume,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in emailed comments.

Meanwhile, the New York Fed’s Empire State business conditions index surged 16 points to 34.3 in September, the regional Fed bank said Wednesday. Economists had expected a reading of 17.2, according to a survey by The Wall Street Journal. The index stood at 18.3 in August. Any reading above zero indicates improving conditions.

Separately, the import price index dropped 0.3% last month, the government said Wednesday, marking the first decline in 10 months. The drop was mostly attributed to the lower cost of foreign oil and industrial supplies.

Overnight news saw a batch of downbeat data from China, where August retail sales grew a disappointing 2.5% from a year earlier, from 8.5% growth in July. Industrial output in August and fixed-asset investment also fell short of expectations. China’s zero-tolerance approach to controlling Covid-19 is posing difficulties for retailers and industry with relatively small outbreaks in the Fujian province this week provoking further lockdowns affecting millions.

Which companies are in focus?

  • Shares of Microsoft Corp. rose 1.3% in premarket trading. The technology giant late Tuesday lifted its quarterly dividend by 11% and the company’s board agreed a new stock buyback plan of up to $60 billion.
  • Shares of Las Vegas Sands and Wynn Resorts fell over 7% each, while MGM Resorts shares fell 3% in premarket. The losses came after casino shares slumped in Macau on indications the local government aims to more closely supervise those companies.
  • Kansas City Southern formally picks Canadian Pacific over Canadian National

How are other assets trading?

  • The yield on the 10-year Treasury note fell 1 basis point to 1.273%. Yields and debt prices move in opposite directions.
  • The ICE U.S. Dollar Index which measures the currency against a basket of six major rivals, fell 0.1% to 92.49.
  • Oil futures were higher, with the U.S. benchmark rising 2.1% to $71.96 a barrel. October natural gas climbed 4.3% to $5.48 per million British thermal units.
  • In European equities, the Stoxx Europe 600 index fell 0.4%, while London’s FTSE 100 index was flat.
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