MW: U.S. stock futures edge lower after Dell disappointment
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- U.S. stock futures on Friday pointed to a somewhat weaker start, hurt by Dell's worse-than-forecast profit drop as traders move toward safer securities like bonds and gold.
S&P 500 futures fell 2.8 points to 1,091.50 and Nasdaq 100 futures weakened 2.5 points to 1,767.70. Futures on the Dow Jones Industrial Average fell 25 points.
An analyst's downgrade of semiconductor sectors contributed to a broad retreat in U.S. equities on Thursday, as the Dow Jones Industrial Average fell 93 points, the S&P 500 dropped 14 points and the Nasdaq Composite tumbled 36 points.
Yields on some Treasury bills maturing early next year fell slightly below zero, a sign of strong demand for safe securities.
Government bond yields in negative territory last happened in December, and before that, in 1929.
On Friday, the yield on two-year Treasury bonds fell 1 basis point to 0.69 percentage points and the yield on the 10-year rose 1 basis point to 3.35%.
"It's incredible that we have such low front-end yields at this stage of a recovery. It shows how fragile we are without the extraordinary intervention fiscally and monetary," said Jim Reid, a strategist at Deutsche Bank.
"We are being collectively forced into risk. That doesn't mean one shouldn't do it but its more of a lesser of two evils rather than an outright positive choice."
Oil futures fell 28 cents to $77.18 a barrel, while gold futures were range bound around $1,142 an ounce.
The U.S. dollar index (DXY 75.53, +0.24, +0.32%) rose 0.3% to 75.58.
There's little on either the corporate or economics calendar scheduled for Friday. JM Smucker (SJM 53.48, -0.19, -0.35%) and D.R. Horton (DHI 12.25, -0.12, -0.97%) are due to report results.
Dell (DELL 15.87, -0.19, -1.18%) shares dropped 6% in Frankfurt after it said late Thursday that its profit dropped 54%, with the company hurt by light corporate spending on computers.
Intuit (INTU 30.27, -0.07, -0.23%) may see pressure on a cautious earnings outlook.
The Gap (GPS 21.86, -0.44, -1.97%) reported a 25% profit rise after controlling inventory to reduce discounts and improved demand at its Old Navy division.
Minutes before Thursday's close, Alcoa (AA 13.22, -0.54, -3.92%) said it's going to idle production at two Italian smelters over concerns about the cost of power supplies following a European Commission decision.
Overseas, the Nikkei 225 closed 0.5% weaker in Tokyo, and the pan-European Dow Jones Stoxx 600 fell 0.1%.
