NEW YORK: US stocks were set to open lower on Wednesday after China retaliated to Washington’s latest tariffs, clouding a strong showing for corporate earnings.
China responded to an equal degree, after Washington said it would begin collecting 25 percent tariffs on another $16 billion in Chinese goods on Aug. 23.
The S&P 500 was just 1 percent shy of a record it hit on Jan. 26 on Tuesday as an estimated 24 percent jump in earnings from S&P companies underscored the strength of the world’s biggest economy and corporate sector.
“We seem to be able to put trade worries on the back burner and focus on second-quarter results, which have been significantly positive,” said Art Hogan, chief market strategist at B. Riley FBR in New York.
“When we see the earnings growth in 2018, the multiples are reasonable at that record level. We’re in a better place in getting to that record high than we were in January.”
At 8:52 a.m. ET, Dow e-minis were down 28 points, or 0.11 percent. S&P 500 e-minis were down 4.25 points, or 0.15 percent and Nasdaq 100 e-minis were down 20.75 points, or 0.28 percent.
A 3.6 percent drop in the shares of Mylan and a 3.2 percent decline in Tesla in premarket trading also weighed.
Mylan dropped after the drugmaker reported quarterly results and said it was actively evaluating a “wide range of alternatives”.
Tesla had closed up 11 percent on Tuesday after Chief Executive Elon Musk said he was considering taking the company private.
With the second-quarter earnings season winding down, 79 percent of S&P 500 companies have topped estimates. If the beat rate holds, it will be the highest on record, dating back to the first quarter of 1994, according to Thomson Reuters I/B/E/S.
CVS Health rose 3.1 percent after the drugstore retailer beat analysts’ estimates for adjusted quarterly profit as it sold more prescription drugs at its stores.
Michael Kors gained 2.7 percent after the fashion house topped Wall Street forecasts for quarterly profit and revenue and raised its full-year earnings forecast.
Walt Disney fell 1.6 percent after its quarterly profit missed estimates as new technology costs rose.
Source: Brecorder
