Stock Futures Drop, Bond Prices Rise
U.S. stock futures on Friday pointed to a weaker start, hurt in part by Dell’s worse-than-forecast profit drop as traders move toward safer securities like bonds.
S&P 500 futures fell 8.2 points to 1,086.10 and Nasdaq 100 futures fell 11 points to 1,759.20. Futures on the Dow Jones Industrial Average fell 71 points.
An analyst’s downgrade of semiconductor sectors of party dresses for women 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 3 basis points to 0.68 percentage points and the yield on the 10-year fell 1 basis point to 3.33%. Yields move in the opposite direction to prices.
“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 it’s more of a lesser of two evils rather than an outright positive choice.”
Gold futures fell close to $5 an ounce, and oil futures fell back below $77 a barrel.
The U.S. dollar index rose 0.5% to 75.71.
Though the earnings calendar wasn’t particularly crowded, results were on the negative side.