Wall Street flat in early trading, oil prices tumble again on China weakness
Business
Wall Street flat in early trading, oil prices tumble again on China weakness
NEW YORK (AP) - Wall Street was flat in premarket trading and oil prices slid again Tuesday on signs of economic weakness in China, where a lack of specifics on a stimulus package continued to drag down markets there.
Futures for the S&P 500 and the Dow Jones Industrial Average were unchanged before the opening bell as corporate earnings continue to pour in.
Troubled airplane manufacturer Boeing rose 1% after it said in regulatory filings that it could raise up to $25 billion over the next three years as it tries to steady its financial standing. Boeing filed notice under what are called “shelf registrations,” which indicate a company has the ability to raise funds, not that it necessarily will do so.
Walgreens Boots Alliance jumped 5% after the drugstore chain said it plans to close about 1,200 locations over the next three years in an attempt to turnaround its struggling U.S. business. Walgreens expects to close about 500 stores this fiscal year, which it said would boost its adjusted earnings and free cash flow.
Chipmaker Wolfspeed climbed more than 27% in off-hours trading after the Biden-Harris administration announced Tuesday that it plans to provide up to $750 million in direct funding to the company. The money will support its new silicon carbide factory in North Carolina that makes the wafers used in advanced computer chips.
UnitedHealth posted sales and profit that beat analyst expectations, but the insurer lowered the top end of its earnings-per share guidance for the year, sending shares down 3.5% before markets opened.
U.S. benchmark crude dropped $3.17, or 4.3%, to $70.66 per barrel. Brent crude, the international standard, slipped $3.08 to $74.38 per barrel.
“The oil market is on a wild ride, caught in a whirlwind of geopolitical tension, OPEC+ strategy shifts and a slowdown from its biggest customer, China,” Stephen Innes of SPI Asset Management said in a report. China’s usual growth in demand of about 600,000 barrels per day has fallen to 200,000 barrels.
Despite uncertainty over how conflict in the Middle East might affect oil supplies, “the real threat to crude isn’t war, it’s oversupply,” Innes said, noting that many oil exporters are committed to ramping up their output.
Besides oil, prices also have been falling for copper and other commodities that a healthy Chinese economy would normally devour.
Chinese shares extended losses after the government reported late Monday that growth in exports fell sharply in September, adding to signs of a sluggish economy.
The Shanghai Composite index lost 2.5% to 3,201.29, while the Hang Seng in Hong Kong gave up 3.7% to 20,318.79.
Weaker than expected data on lending and prices have undermined already fragile market sentiment that has wavered as investors await fresh details on the government plans for stimulus to help rev up the economy.
“Market participants continue to seek for clarity around fiscal stimulus support from Chinese authorities, but the lack of commitment remains a source of reservation for risk-taking in Chinese equities,” Yeap Jun Rong of IG said in a commentary.
Tokyo’s Nikkei 225 index gained 0.8% to 39,910.55, while the Kospi in Seoul gained 0.4% to 2,633.45.
In Australia, the S&P/ASX 200 was up 0.8% to 8,318.40.
Germany’s DAX gained 0.3% at midday in Europe, while the CAC 40 in Paris dropped 0.9% and Britain’s FTSE 100 lost 0.4%.
Also early Tuesday, the dollar fell to 149.38 Japanese yen from 149.83 yen. The euro ticked down to $1.0903 from $1.0911.
This week will have few top-tier economic reports outside of an update Thursday on sales at U.S. retailers. That leaves the emphasis on corporate earnings reports, which will pick up the pace this week after big banks began the reporting season last week.
Later in the week will come reports from United Airlines, Netflix, American Express and Procter & Gamble.
