Wall St set to open flat on fears over slowing economic growth

  • Reuters
  • Stock Market News
Wall St set to open flat on fears over slowing economic growth
Credit: © Reuters.

By Shashank Nayar

(Reuters) -Wall Street was set to open flat on Wednesday on concerns that the spread of the Delta coronavirus variant could slow economic growth and on uncertainty over the timeline for the Federal Reserve to pull back its accommodative policies.

Shares of tech heavyweights were mixed in premarket trading with Microsoft Corp (NASDAQ: MSFT ) and Facebook Inc (NASDAQ: FB ), down 0.1% and 0.2%, respectively, while Google-owner Alphabet (NASDAQ: GOOGL ) Inc, Netflix Inc (NASDAQ: NFLX ) and Amazon.com Inc (NASDAQ: AMZN ) inched around 0.2% higher each.

U.S. stocks have come under pressure in recent days as investors have turned increasingly cautious following Friday's weak August payrolls data and uncertainty over the Fed's tapering.

"The big question is the uncertainty around the level of economic growth slowdown, tapering and the potential of escalating inflation," said Sam Stovall, chief investment strategist at CFRA.

"Investors are thinking they don't want to be highly exposed towards potential growth sectors, instead the interest remains towards the safety of tech stocks."

St. Louis Federal Reserve Bank President James Bullard told the Financial Times that the U.S. Federal Reserve should move forward with a plan to trim its massive pandemic stimulus program despite a slowdown in job growth.

The S&P 500 and Dow Jones indexes closed lower on Tuesday, but the Nasdaq edged up to an all-time high after Apple Inc (NASDAQ: AAPL ) and Netflix Inc hit record levels.

Stovall said CFRA economists are lowering the growth forecasts for the third quarter, but were still optimistic for the wider economy to grow for the rest of the year.

The S&P 500 and the Nasdaq have gained around 20% so far this year on support from easy central bank policies, but a jump in coronavirus infections and weak economic data have raised worries on the pace of economic recovery.

At 8:47 a.m. ET, Dow e-minis were down 17 points, or 0.05%, S&P 500 e-minis were down 2.5 points, or 0.06%, and Nasdaq 100 e-minis were down 5.75 points, or 0.04%.

U.S. payments giant PayPal Holdings Inc (NASDAQ: PYPL ) rose 1.8% after it said it would acquire Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 billion largely cash deal.

Tesla (NASDAQ: TSLA ) Inc gained 1.2% after the China Passenger Car Association said the electric vehicle maker sold 44,264 China-made vehicles in August and reported a jump on local deliveries.

Perrigo Company Plc jumped 4% after the drugmaker said it plans to buy HRA Pharma from investment firms Astorg and Goldman Sachs (NYSE: GS ) Asset Management in a deal valued at 1.8 billion euros ($2.13 billion).

© Reuters. A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 10, 2021. REUTERS/Andrew Kelly

Cryptocurrency exchange Coinbase (NASDAQ: COIN ) Global Inc fell 3.6% after the U.S. securities regulator threatened to sue the firm if it goes ahead with plans to launch a crypto lending scheme.

Oil stocks Exxon Mobil (NYSE: XOM ), Chevron (NYSE: CVX ), Occidental Petroleum (NYSE: OXY ) and Halliburton (NYSE: HAL ) were among gainers, up between 1.1% and 0.3%, as oil prices jumped on lower output. [O/R]

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