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US futures lower on the dawn of Elon Musk era at Twitter

Futures for the Dow Jones Industrial Average wavered between small losses and gains, while futures for the S&P slipped 0.6%. The tech-heavy Nasdaq portended another tough day for technology companies, losing 1.1% before the bell and on track for a weekly decline.

AP Reported By: AP Washington Published on: October 28, 2022 19:20 IST
US futures lower on the dawn of Elon Musk era at Twitter
Image Source : AP US futures lower on the dawn of Elon Musk era at Twitter

Wall Street pointed toward declines before markets opened Friday, but most major U.S. indices were still on track for rare back-to-back weekly gains, as an awful week for technology companies comes to a close and the Elon Musk era at Twitter begins.

Futures for the Dow Jones Industrial Average wavered between small losses and gains, while futures for the S&P slipped 0.6%. The tech-heavy Nasdaq portended another tough day for technology companies, losing 1.1% before the bell and on track for a weekly decline.

Amazon slid more than 13% in premarket trading after the retail giant issued an estimate for sales in the last quarter of the year came in well below analysts’ forecasts. The stock fell 4.1% in regular trading Thursday before the release of its latest quarterly results.

Amazon’s dour forecast came after Facebook’s parent company, Meta Platforms, plummeted 24.6% for the biggest drop in the S&P 500 after reporting a second straight quarter of revenue decline amid falling advertising sales and stiff competition from TikTok. It joined other tech and communications stocks, such as Google’s parent company, Alphabet, and Microsoft, in reporting weak results and worrisome forecasts over advertising demand.

Musk has taken control of Twitter after a protracted legal battle and months of uncertainty and almost immediately ousted three top executives at the social media company on Thursday, according to two people familiar with the deal who said the Tesla CEO was now in charge.

The people wouldn’t say if all the paperwork for the deal, originally valued at $44 billion, had been signed or if the deal had closed. A Delaware judge had ordered that the deal be finalized by Friday.

The New York Stock Exchange notified investors that it will suspend trading in shares of Twitter before the opening bell Friday in anticipation of the company going private under Musk. Twitter closed at $53.70 on Thursday.

In Europe, Germany’s DAX dropped 0.9%, the CAC40 in Paris lost 0.6% and Britain’s FTSE 100 shed 0.6%.

Shares fell in Tokyo even as the government approved a massive stimulus spending package to help the world’s No. 3 economy cope with inflation. As expected, the Bank of Japan wrapped up a policy meeting by keeping its ultra-lax monetary policy unchanged even as it forecast higher inflation.

The Nikkei 225 index lost 0.9% to 27,105.20.

The stimulus package includes government funding of about 29 trillion yen ($200 billion) in subsidies and other measures to help soften the burden of costs from rising utility rates and food prices. It is also designed to help shore up support for Prime Minister Fumio Kishida, whose popularity has taken a beating due to a scandal over ties between the ruling Liberal Democratic Party and the South Korea-based Unification church.

In Hong Kong, the Hang Seng lost nearly 565 points to 14,863.06, while the Shanghai Composite index shed 2.3% to 2,915.93. News of new coronavirus outbreaks in China added to concerns, as technology shares sank after the major selling of big tech companies on Wall Street.

Chinese e-commerce giant Alibaba’s Hong Kong-listed shares tumbled 4.8%, while JD.com lost 6.7%. Hong Kong’s tech index, which includes 30 top technology companies listed in Hong Kong, dropped 5.6%.

Elsewhere in Asia, the Kospi in Seoul declined 0.8% to 2,268.40 and Australia’s S&P/ASX 200 dropped 0.9% to 6,785.70. In India, the Sensex rose 0.3%, while Bangkok’s SET edged 0.2% higher.

Excluding the Nasdaq, the major indexes are on pace for weekly gains. And the S&P 500 remains solidly on track to end October in the green.

Wall Street has more earnings to review Friday, including Exxon Mobil, Chevron and Charter Communications.

Markets got some encouraging economic news Thursday as the government reported the U.S. economy returned to growth last quarter, expanding 2.6%. That marks a turnaround after the economy contracted during the first half of the year.

The economy has been under pressure from stubbornly hot inflation and the Federal Reserve’s efforts to raise interest rates in order to cool prices. The central bank is trying to slow economic growth through rate increases, but the strategy risks going too far and brining on a recession.

In other trading, the dollar rose to 147.26 Japanese yen from 146.31 yen late Thursday. The euro was inched back to 99.50 cents from 99.66 cents.

Benchmark U.S. crude oil lost 99 cents to $88.09 per barrel in electronic trading on the New York Mercantile Exchange. It gained $1.17 on Thursday to $89.08 per barrel. Brent crude oil lost 79 cents to $94.25 per barrel.

On Thursday, Wall Street had a mixed session as carnage among tech companies offset gains in other sectors. The S&P 500 fell 0.6%, with about 44% of stocks within the benchmark index losing ground. The tech-heavy Nasdaq fell 1.6%, while the Dow Jones Industrial Average rose 0.6%. The Russell 2000 index added 0.1%.

Also Read: Who is Parag Agrawal? Former Twitter CEO 'escorted out' after Elon Musk takeover

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