Market Snapshot: Stock futures point to pullback as earnings season ramps up

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Stock-index futures lost ground Tuesday, pointing to a pullback from the previous session’s strong gains, as investors weigh another round of corporate earnings reports and continue to watch for signs the COVID-19 pandemic is peaking.

What are major indexes doing?

Futures on the Dow Jones Industrial Average YM00, -1.61% fell 343 points, or 1.3%, to 23,549, while S&P 500 futures ES00, -1.82% were down 1.7%. Nasdaq-100 futures NQ00, -0.98% declined 1%.

The Dow DJIA, +2.39% on Tuesday rose 558.99 points, or 2.4%, to end at 23,949.76, while the S&P 500 SPX, +3.05% finished 84.43 points higher, up 3.1%, at 2,846.06. The Nasdaq Composite Index COMP, +3.94% rose 323.32 points or 4%, ending at 8,515.74.

Read:The S&P 500 just posted the most daily swings of 3% or greater in more than a decade

What’s driving the market?

U.S. stock futures fell early Wednesday along with stocks in Europe as investors waited for corporate earnings to gauge the impact of the coronavirus pandemic. E.U. and U.S. federal officials are planning to lift restrictions to help revive their economies, but earnings reports may provide a clearer picture of how the pandemic is affecting business with the global economy headed for a deep recession according to the IMF on Tuesday.

“While many governments are working towards ending lockdown measures, investors are more attentive to the time schedule with which companies may return to catch up with profits,” said Pierre Veyret, technical analyst at ActivTrades, in a note

Johnson & Johnson jnj JNJ, +4.47% , JPMorgan Chase & Co. JPM, -2.74% and Wells Fargo & Co. WFC, -3.97% offered a mixed picture Tuesday, with Goldman Sachs Group Inc. GS, -0.53% , Citigroup Inc. CITI, +1.47% and Bank of America Corp. BAC, -0.79% reporting Wednesday.

Bank of America fell 2.9% in premarket trading Wednesday, after the moneycenter bank reported a first-quarter profit that fell below expectations, amid a $3.6 billion COVID-19-related reserve build, while revenue topped forecasts.

Another fall in crude oil prices also pressured energy stocks on Wednesday after the IEA forecast a record fall in demand.

Airline stocks were up sharply though in premarket trading after several U.S. airlines late Tuesday reached agreement with the U.S. Treasury for billions in grants and loans aimed at helping them from the coronavirus pandemic.

Investors will get further evidence of the early hit to the economy from the pandemic with March retail sales data, due at 8:30 a.m. Eastern. Economists surveyed by MarketWatch, on average, forecast a 7.1% monthly fall in sales, with the figure excluding autos expected to show a 4.7% decline.

The April Empire State Index is also due at 8:30 a.m., while March industrial production and capacity utilization are set for release at 9:15 a.m. Eastern. The Federal Reserve’s so-called beige book report, a compilation of anecdotes on economic activity, is due at 2 p.m. Eastern.

See:Stocks rally as investors ask the ‘wrong question’ about coronavirus and reopening the economy, analyst says

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Which companies are in focus?

Earnings season continues Wednesday, with shares of Bank of America Corp. BAC, -0.79% off more than 2% in premarket trade after delivering results. Big banks JPMorgan Chase & Co. JPM, -2.74% and Wells Fargo & Co. WFC, -3.97% kicked off earnings season on Tuesday.

Airline shares were in focus after the biggest carriers reached an agreement in principle with the federal government on financial assistance aimed at averting layoffs in the hard-hit industry. Shares of Delta Air Lines Inc. DAL, +5.54% jumped nearly 8% in premarket action, while United Airlines Holdings Inc. UAL, +6.88% rose 8.2% and American Airlines Group AAL, +3.33% jumped more than 10%.

Also see:Airlines say deal on bailout includes provisions for government ownership

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