Stock futures moved lower ahead of Monday's open, with tech-sector stocks under early pressure and as markets looked toward the Federal Reserve's monetary policy vote on Wednesday.
XNasdaq 100 futures were clearly leading the early losses, trading 1.1% below fair value as Facebook (FB) posted the index's heaviest early loss and Apple (AAPL) and Tesla (TSLA) shifted sharply lower.
Futures for the Dow Jones industrial average hung out an early 0.4% decline. S&P 500 futures were 0.5% below fair value.
A number of news items, affecting Apple, Facebook, rippled across early trade. News late Friday of the firing of the FBI's Andrew McCabe – followed by amped-up criticism from the White House of special counsel Robert Mueller's investigation — may have had some early impact on investor confidence. The White House came under sharp criticism early Monday for speaking out against Mueller's probe.
But markets may also simply lay low early in the week as the Federal Open Market Committee swings into its two-day meeting on Tuesday, with a rate policy decision due on Wednesday followed by a press conference. The economic calendar is otherwise largely clear until Wednesday morning.
Apple Tests New Screens; Facebook Falls On Data Sharing
All but one of the Dow's 30 stocks traded lower ahead of the open. Cisco Systems (CSCO) was down hardest, with a 0.9% decline. Verizon (VZ) was the holdout, up 0.2%. Cisco shares are up 28% from a November breakout, and in a profit-taking zone.
Tech leadership faced a squall of premarket selling as Apple news triggered selling among its supply-chain stocks, while Facebook dived more than 3% and Tesla narrowed its early loss t0 1.4%.
Apple pared early losses after news reports said the company was, for the first time, making its own display screens. A secret site near the company's California headquarters was testing next-generation microLED screens, according to Bloomberg. The device screens used a different light-emitting compound than organic LED displays, the report said, and were thinner, bright and more energy efficient.
Facebook slumped after revealing a company with ties to the 2016 Trump presidential campaign retained data from 50 million user accounts that should have been destroyed. The news launched a backlash over how the social media site handles its third-party data access. The New York Times reported lawmakers in the U.S. and Britain were demanding explanation for how a political contractor came to possess the data. The stock has been hugging its 10-week line in a six-week flat base.
Also among the FANG stock tech leaders, Google-parent Alphabet (GOOGL) is on watch, trading below an 1198.10 buy point in a seven-week cup base. The stock is also fashioning a possible handle on that base, which could offer a much lower entry as early as Tuesday.
Chip stocks felt some early pressure, particularly LED-related stocks on the the Apple screens news. Universal Display (OLED) collapsed more than 9%. ON Semiconductor (ON) took an early 2.6% dive to lead the declines among Philadelphia Semiconductor Index stocks. Nvidia (NVDA), Applied Materials (AMAT) and Broadcom (AVGO) all traded down nearly 2% in premarket action.
Among IBD 50 names, chip inspection equipment maker Orbotech (ORBK) spiked 12% ahead of the open, after KLA-Tencor (KLAC) agreed to acquire the Israel-baed company for $3.4 billion. KLA said the deal should close before the end of the year, and generate $50 million in annual cost savings within 24 months. KLA shares slumped 0.9% in early trade.
Two China-based names reported earnings early Monday. Canadian Solar (CSIQ), headquartered in Canada but with its operations in China, edged a fraction higher after positive Q4 results. China-based peer JinkoSolar (JKS) popped 5%, ahead of its fourth-quarter report, scheduled for Thursday.
Cheetah Mobile (CMCM) jumped 5% after reporting a wide miss on earnings in its fourth quarter, but with above-target revenue and strong guidance. The volatile stock had triggered the automatic sell rule last week, diving more than 8% below a 13.30 buy point following an early January breakout.
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