Dow Set To Fight For Direction, But Flirts With Biggest Two-week Drop In Nearly A Year

By Sara Sjolin, MarketWatch

Investors absorb Trump issues, attacks in Spain

U.S. stock futures struggled for direction Friday, with investors staying cautious after the prior day's selloff that was fueled in part by a terrorist attack in Barcelona and rumors that a economic adviser to President Donald Trump might resign.

Futures for the Dow Jones Industrial Average lost 12 points, or 0.1%, to 21,721, while those for the S&P 500 index fell 1 point, or 0.04%, to 2,428.50. Futures for the Nasdaq-100 index was flat at 5,800.25.

The subtle moves come after aggressive selling on Thursday, when the S&P 500 index slumped 1.5% for its biggest one-day percentage drop in three months. The Dow average and Nasdaq Composite Index ended down 1.2% and 1.9%, respectively.

As of Thursday's close, the benchmarks are now on track for weekly losses around 0.5%. The Dow is on track for its largest two-week percentage decline since mid-September last year, while the Nasdaq is flirting with its longest weekly losing streak since May 2016, as it has fallen for four weeks in a row.

"In a week where we started by worrying about nuclear war, markets have quickly moved on from this, with yesterday's weak session more of a response to fears that Mr. Trump's strategy for the economy and business is falling apart," strategists at Deutsche Bank said in a note. And later in the session, the "terrible terrorist attack" in Barcelona, Spain, weighed on markets, the strategists added.

At about 5 p.m. Thursday local time, or 11 a.m. Eastern Time, a van plowed into crowds in one of Barcelona's busiest spots, killing 13 people and injuring more than 100. Islamic State has claimed responsibility (http://www.marketwatch.com/story/islamic-state-takes-credit-for-deadly-barcelona-attack-on-pedestrians-2017-08-17) for the terror attack. Hours after the Barcelona incident, police killed five alleged terrorists following a separate attack that hurt seven people in Cambrils, a Spanish town southwest of Barcelona.

European stocks were sharply lower on Friday following the attacks. Spain's IBEX 35 index was among the hardest hit, down 1% at 10,342.20.

Also spooking investors were reports on Thursday that Gary Cohn was planning to resign as an economic adviser to the president. The White House has countered those rumors.

See:Team Trump losing Gary Cohn could crash the stock market, warns Yale professor (http://www.marketwatch.com/story/team-trump-losing-gary-cohn-could-crash-the-stock-market-warns-yale-professor-2017-08-17)

Cohn is "seen as the glue holding Trump's pro-business agenda together," Deutsche Bank's strategists said. "The fears are that if he goes, you take a further step back from tax cuts and deregulation."

The dollar was knocked lower on the Cohn speculation and continued lower on Friday. The ICE Dollar Index was down 0.1% at 93.57.

Stock movers: Shares in Ross Stores Inc.(ROST) rallied 11% in thin premarket trade after the off-price retailer late Thursday reported earnings and sales above forecasts (http://www.marketwatch.com/story/ross-stores-shares-rally-as-q2-earnings-top-views-company-forecasts-sales-growth-2017-08-17).

Investors also cheered earnings (http://www.marketwatch.com/story/applied-materials-stock-jumps-on-third-quarter-earnings-and-sales-beat-2017-08-17) from Applied Materials Inc.(AMAT) out late Thursday, sending the chip equipment supplier's shares up 5% ahead of Friday's opening bell.

Calpine Corp.(CPN) soared 11% in premarket trade after a Wall Street Journal report late Thursday said Energy Capital Partners is closing in on a $17 billion deal (http://www.marketwatch.com/story/energy-capital-partners-nears-17-billion-deal-to-buy-calpine-report-2017-08-17) to acquire the power company.

U.S.-listed shares of Infosys Ltd.(500209.BY) slid 10% ahead of the bell after Vishal Sikka on Friday resigned as chief executive (http://www.marketwatch.com/story/infosys-ceo-resigns-citing-resistance-to-change-2017-08-18).

On the earnings front Friday, Foot Locker Inc.(FL) , Deere & Co.(DE) and Estée Lauder Cos.(EL) are all slated to report ahead of the bell.

Economic news: A consumer sentiment reading for August is due at 10 a.m. Eastern Time.

On the Federal Reserve front, Dallas Fed President Robert Kaplan is due to speak at a community college event in Dallas at 10:15 a.m. Eastern.

Other markets:Asia markets closed broadly lower (http://www.marketwatch.com/story/nikkei-slumps-to-3-month-low-as-asian-markets-dip-2017-08-17), with Japan's Nikkei 225 index finishing at a three-month low.

Oil prices continued higher on Friday, rising 0.4% to $47.27 a barrel. Metals were higher across the board, with gold up 0.6% at $1,299.50 an ounce on increased haven demand.

 (END) Dow Jones Newswires
 August 18, 2017 05:09 ET (09:09 GMT)
 Copyright (c) 2017 Dow Jones & Company, Inc.































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