The Day Ahead: Equity Markets Look for Traction After Heavy Losses

Markets are continuing to suffer from yesterday’s losses ― the Dow dropped 213 points or 2.01% yesterday, the worst performance in three months ― and this morning equity futures are slipping further south.

“Note that with yesterday’s decline, the TSX [Toronto Stock Exchange], Dow and Nasdaq are all down for the year, while the S&P 500 is clinging to a 0.1% gain,” said economists from BMO. 

Even the dollar, which often trades inversely to stocks on a day-to-day basis, weakened overnight.

Recent earnings have failed to induce investor appetite despite some positive results. Google reported fourth-quarter earnings of $6.79 per share, versus $6.44 estimates. And American Express earned 59 cents per share compared to the consensus of 57 cents.

This morning, GE also posted earnings per share of 28-cents, two cents above the consensus call, with revenue also higher than predictions at $41.4 billion. However net profit fell 19%, according to the Journal, “as the company was again dinged by a big drop in earnings from its finance arm.” 

90 minutes before the opening bell, Dow Futures are off 27.00 points to 10,311, S&P 500 futures are down 2.00 points to 1,109.00. Commodities are also weak: WTI Crude oil down 41 cents to $75.67 per barrel, and Gold is off $10.70 to $1,092.50 per ounce.

After yesterday's Obama Bank Plan induced sell off, equity markets could use a shove in the other direction today, but no significant data will be released until after the weekend.