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Stock-index futures falter ahead of U.S. GDP data, weekly jobless benefit claims

Futures contracts pointed to a lower start for U.S. stock indexes Thursday ahead of data expected to show a third of the U.S. economy disappeared in the second quarter on an annualized basis, and a weekly jobless benefit claims report that could indicate the economy’s bounceback from the coronavirus pandemic is losing steam amid a renewed rise in COVID-19 cases.

A lack of progress in talks between congressional Democrats, Republicans and the White House on a new coronavirus aid package were also weighing on sentiment.

What are major indexes doing?

Futures on the Dow Jones Industrial Average
YM00,
-0.74%
fell 242 points, or 0.9%, to 26,198, while S&P 500 futures
ES00,
-0.75%
were off 31.90 points, or 1%, at 3,220.50. Nasdaq-100 futures
NQ00,
-0.83%
were off 113.50 points, or 1.1%, at 10,560.75.

The Dow
DJIA,
+0.60%
rose 160.29 points, or 0.6%, to close at 26,539.57, while the S&P
SPX,
+1.24%
advanced 40 points, or 1.2%, finishing at 3,258.44. The Nasdaq Composite
COMP,
+1.35%
jumped 140.85 points, or 1.4%, to end at 10,542.94.

What’s driving the market?

Investors will get an estimate of how severely the pandemic hammered the economy in the second quarter when the government releases gross domestic product data at 8:30 a.m. Eastern. Economists polled by MarketWatch estimate GDP contracted at a record 34.6% annual pace from the start of April to the end of June.

Separately, first-time claims for unemployment benefits last week are expected to rise to 1.51 million from 1.42 million the previous week.

“Last week, jobless claims pointed to the recovery in the labor market stalling,” said Fiona Cincotta, market analyst at City Index, in a note. Although “one week by no means constitutes a new trend, two weeks of a stalling recovery could be more unnerving and drag sentiment lower.”

There were no signs of progress toward a spending package as lawmakers face a self-imposed Friday deadline to work out a deal. That’s when supplemental unemployment benefits, which have been credited with helping to cushion the blow of the pandemic, are due to expire.

Stocks extended gains Wednesday after the Fed left interest rates unchanged as expected, but indicated that it planned to keep rates near zero and continue to provide support to the economy — and do more if needed. Fed Chairman Jerome Powell warned that the resurgence in coronavirus cases in many U.S. states may be damping economic growth and said that the path of the recovery depends on the path of the virus.

It’s the most hectic week of corporate earnings reporting season, with results from dozens of high-profile companies due on Thursday, including Dunkin Brands
DNKN,
+2.81%,
DuPont de Nemours Inc.
DD,
+2.79%,
Northrop Grumman Corp.
NOC,
+0.76%,
Eli Lilly & Co.
LLY,
-0.55%
and Yum Brands Inc.
YUM,
+2.24%
ahead of the bell.

A slew of technology giants are due to report after the close, including Google parent Alphabet Inc.
GOOG,
+1.44%
GOOGL,
+1.32%,
Apple Inc.
AAPL,
+1.91%
Facebook Inc.
FB,
+1.37%
and Amazon.com Inc.
AMZN,
+1.10%.

Chief executives from those four companies were grilled for hours Wednesday in a virtual hearing before the antitrust subcommittee of the House Judiciary Committee.

Read:Amazon, Apple, Facebook and Google CEOs grilled by House members in historic antitrust hearing

Which companies are in focus?
  • Procter & Gamble Co.
    PG,
    +0.33%
    shares jumped more than 2% after the consumer products company delivered fiscal fourth-quarter profit and revenue that topped expectations and provided an upbeat outlook, driven by increased demand for household cleaning and personal health products amid the COVID-19 pandemic.

  • Shares of United Parcel Service Inc.
    UPS,
    +3.39%
    jumped more than 6% in premarket trading, after the package delivery giant reported second-quarter profit and revenue that easily topped forecasts, driven by a surge in residential demand and health care shipments that emerged from the COVID-19 pandemic.

  • Eli Lilly shares
    LLY,
    -0.55%
    were up more than 2% ahead of the bell after the drugmaker beat profit expectations and raised its full-year outlook, while revenue fell short of forecasts.

  • Northrop Grumman
    NOC,
    +0.76%
    Shares of  
    advanced 1.5% in premarket action after the defense contractor delivered larger-than-expected profit and sales for the second quarter and raised its full-year guidance.

  • DuPont shares
    DD,
    +2.79%
    were little changed in premarket trade after the chemical company reported a wider-than-expected loss.

  • Dunkin’ Brands
    DNKN,
    +2.81%
    shares were up in premarket after reporting second-quarter adjusted profit that fell below expectations, but revenue that fell less than forecast and announced the reinstatement of its dividend program.

What are other markets doing?

In Asia, China’s CSI 300 index
000300,
-0.48%
fell 0.5%, the Shanghai Composite
SHCOMP,
-0.23%
declined 0.2%, Hong Kong’s Hang Seng Index
HSI,
-0.69%
lost 0.7% and Japan’s Nikkei 225
NIK,
-0.25%
gave up 0.3%.

In European trade, the Stoxx 600 Europe index
SXXP,
-1.21%
dropped 1.6% and the U.K.’s FTSE 100
UKX,
-1.62%
was off 1.9%.

Gold futures
GCQ20,
-0.36%
were off 0.3%, while the ICE U.S. Dollar Index
DXY,
+0.11%
edged up 0.1%. Oil futures
CLU20,
-1.62%
were lower, with the U.S. benchmark
CLU20,
-1.62%
falling 1.6% on the New York Mercantile Exchange.

The yield on the 10-year U.S. Treasury note
TMUBMUSD10Y,
0.563%
dropped 2.2 basis points to 0.555%. Yields move in the opposite direction of prices.

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