China and US agree to extend trade tariff truce, says Li
* Netflix tumbles as U.S. subscribers drop
* Union Pacific rises after qtrly profit beat
* Morgan Stanley beats profit estimates
* Futures: Dow down 0.17%, S&P flat, Nasdaq off 0.07%
(Changes comment, adds details; Updates prices)
By Medha Singh
July 18 (Reuters) - Wall Street's main indexes were set for
a flat open on Thursday as investors awaited more developments
around trade, while Netflix posted a surprise drop in U.S.
subscribers, kicking off earnings for the FAANG group of stocks
on a sour note.
Streaming pioneer Netflix Inc NFLX.O sank 10.4% premarket
and was on pace to open at its lowest level since late-January,
as it also missed targets for new subscribers overseas at a time
when it has staked its future on global expansion. Trade worries have been weighing on markets for the last few
weeks and the disappointing earnings so far have just amplified
that pressure, Mark Luschini, chief investment strategist at
Janney Montgomery Scott in Philadelphia, said.
"Netflix did nothing to soothe investor concerns around what
earnings prospects are likely to unfold over the next couple of
weeks."
A recent rally in Wall Street's main indexes stumbled this
week as second-quarter earnings roll in and investors await the
Federal Reserve's policy meeting at the end of this month.
"With the run we've had in the market, conditions have been
overbought and in that light the market have been right in
releasing some of that pressure from the rally."
The three main indexes are headed for their sharpest weekly
drop in seven weeks after hopes of an interest rate cut from the
Federal Reserve helped them recover from a slump in May and hit
record highs.
In trade-related news, U.S. Treasury Secretary Steven
Mnuchin said that Beijing and Washington were set to talk over a
phone call on Thursday. At 8:56 a.m. ET, Dow e-minis 1YMcv1 were down 47 points,
or 0.17%. S&P 500 e-minis EScv1 were down 0.75 points, or
0.03% and Nasdaq 100 e-minis NQcv1 were down 5.75 points, or
0.07%.
Offering some support to markets was Union Pacific Corp
UNP.N , which rose 3.2% after reporting a profit beat, a day
after its smaller rival CSX Corp's CSX.O results raised
concerns of trade dispute hurting the transportation sector.
Profit at S&P 500 companies is expected to rise 0.4% in
second quarter, according to Refinitiv IBES data.
International Business Machines Corp IBM.N fell 1.2% as it
did not raise its full-year profit forecast even though its
quarterly profit beat on strong growth in its high-margin cloud
business. EBay Inc EBAY.O jumped 5.4% after the e-commerce company
posted better-than-expected quarterly revenue and profit, helped
by growth in its advertising and payments businesses.
Morgan Stanley MS.N reported a drop in quarterly profit,
but beat analysts' expectations on slim gains in its wealth
management business and lower expenses. Its shares fell 1.3%.
Morgan Stanley rounds up earnings for the big Wall Street
banks, which have raised concerns of lower interest rates
hurting profits.