Wall Street set to open lower ahead of July factory activity data

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 27, 2022. REUTERS/Brendan McDermid

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  • ISM data on manufacturing activity due at 10 a.m. ET
  • EVO Payments pounces on $4 billion deal from Global Payments
  • Futures down: Dow 0.24%, S&P 0.36%, Nasdaq 0.25%

Aug 1 (Reuters) – U.S. stock indices were expected to open lower on Monday after a strong rally last week on earnings optimism, as investors await data on factory activity after similar surveys in China and the eurozone fueled recessionary concerns.

The S&P 500 and Nasdaq posted their biggest monthly percentage gains since 2020 in July on stronger-than-expected second-quarter results and hope that the Federal Reserve needn’t be as aggressive with stocks. interest rate hikes that some had feared.

The upbeat mood faded on Monday as surveys showed factories in Asia and Europe struggled to gain momentum in July amid falling global demand and tight COVID restrictions. -19 in China slowed production. Read more

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The Institute of Supply Management’s Manufacturing Purchasing Managers’ Index, due at 10 a.m. ET, is expected to show factory activity slowed in July to 52.0 from June’s 53.0, according to a Reuters poll. .

“Manufacturing is a small part of the U.S. economy, but it tends to top what you’ll see later in services data, which is a larger part of the overall economy,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab.

The factory activity data will be followed on Friday by the monthly U.S. jobs report, which will be analyzed for clues to the Fed’s next moves.

The US central bank has raised interest rates by 2.25 percentage points so far this year and has pledged to be data-driven in its approach to future hikes.

Worries of a recession have weighed on equity markets this year, with the benchmark (.SPX) down 13.3% as investors adjust their expectations on economic growth and corporate earnings amid tightening financial conditions.

However, the earnings season showed that companies were much more resilient in the second quarter than expected.

Of the 279 S&P 500 companies that reported results, 77.8% beat earnings estimates, according to Refinitiv data. The long-term average is 66.1%.

Activision Blizzard (ATVI.O), Devon Energy (DVN.N) and Simon Property Group (SPG.N) are expected to release their quarterly results later today.

As of 8:26 a.m. ET, Dow e-minis were down 78 points, or 0.24%, S&P 500 e-minis were down 14.75 points, or 0.36%, and e-minis Nasdaq 100 were down 32.25 points, or 0.25%.

Boeing Co (BA.N) gained 4.7% in premarket trading after a Reuters report that the U.S. Federal Aviation Administration approved the aircraft maker’s inspection and modification plan to resume operations. deliveries of 787 Dreamliners. Read more

Global Payments Inc (GPN.N) rose 3.5% after the fintech company agreed to buy its smaller peer EVO Payments Inc (EVOP.O) for nearly $4 billion including debt, in order to develop in the business-to-business (B2B) space. Read more

Shares of EVO Payments jumped 20.7%.

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Reporting by Aniruddha Ghosh and Devik Jain in Bengaluru; Editing by Arun Koyyur

Our standards: The Thomson Reuters Trust Principles.

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