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US stock futures point to another drop on Thursday

Xinhua Financein CNBC
2018-10-11 17:11

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Overnight Dow Jones industrial average futures fell by 44 points, as of 7:54 p.m. ET, signaling the October stock market drop that intensified on Wednesday could continue on Thursday. The futures implied the Dow will open Thursday down by 135.74 points.

Overnight S&P 500 futures, for their part, erased earlier losses but still pointed to a decline at Thursday's open.

The SPDR S&P 500 ETF fell 0.57 percent in after hours trading Wednesday, after falling 3.2 percent during a day which saw stocks sell off throughout the afternoon.

"October weakness intensified today as volume surged and selling was widespread," said Bruce Bittles, chief investment strategist at Baird, in a note after Wednesday's close. "We may need to see evidence of exhaustive selling, increased investor pessimism and a healthier breadth back-drop to suggest that near-term risks are ebbing."

The Dow Jones Industrial Average closed 831.83 points lower at 25,598.74 as Intel and Microsoft fell more than 3.5 percent each. The Nasdaq Composite plummeted 4 percent to 7,422.05 as Amazon and chip stocks declined. It was the worst for the Dow and S&P since February.

The Invesco QQQ Trust, which tracks the Nasdaq-100, fell 0.7 percent in after hours trading Wednesday, signaling tech stocks would be under pressure once again in Thursday's session.

The S&P 500 dropped 3.3 percent to 2,785.68, with the tech sector underperforming. The broad index also posted a five-day losing streak — its longest since November 2016 — and fell below its 50-day and 100-day moving averages, widely followed technical levels.

"While seasonal tendencies become increasingly favorable moving toward year-end, we have yet to see evidence that overall selling has reached downside exhaustion," Bittles said. "For now, caution remains warranted."

Both the Dow and S&P 500 posted their biggest one-day drops since early February, while the Nasdaq notched its largest single day sell-off since June 24, 2016.

Stocks have fallen sharply this month. For October, the S&P 500 and the Dow are down more than 4.4 percent and 3.3 percent, respectively. The Nasdaq, meanwhile, has lost more than 7.5 percent.

Source: CNBC
Translated by Coral Zhong
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