* Apple down after Needham downgrade
* Energy stocks flat despite oil jump
* Defense stocks rise premarket
* Futures down: Dow 0.63%, S&P 0.56%, Nasdaq 0.69%
(For a live blog on the U.S. stock market, click LIVE/ or
type LIVE/ in a news window.)
By Sruthi Shankar
Jan 6 (Reuters) - U.S. stocks were set fall for a second
straight session on Monday as escalating tensions between the
United States and Iran prompted investors to seek refuge in
safer assets such as gold and government bonds.
After ending 2019 on a strong note, Wall Street's main
indexes have been knocked off record levels after the killing of
a top Iranian general by the United States last week raised the
threat of a new Middle East conflagration. Tehran has threatened to avenge the killing of its
commander, Qassem Soleimani, while President Donald Trump has
warned that the United States would strike back, "perhaps in a
disproportionate manner", if Iran retaliated.
"Tensions in Middle East raise concerns for investors
following what has been a really great period in markets," said
Rick Meckler, partner at Cherry Lane Investments in New Vernon,
New Jersey. "Certainly, some are using this as a reason to step
back a little bit."
Brent crude futures LCOc1 topped $70 per barrel after
Trump also threatened to impose sanctions on Iraq if U.S. troops
were forced to withdraw from the country. O/R
Oil majors Chevron CVX.N and Exxon Mobil XOM.N were flat
after trading marginally higher in early hours.
Shares of Lockheed Martin LMT.N , the world's largest
defense contractor, rose 1.7%, while peers Northrop Grumman
NOC.N and Raytheon RTN.N gained about 1.5%.
At 08:59 a.m. ET, Dow e-minis 1YMcv1 were down 179 points,
or 0.63%. S&P 500 e-minis EScv1 were down 18 points, or 0.56%
and Nasdaq 100 e-minis NQcv1 were down 60.5 points, or 0.69%.
The latest geopolitical concerns have added to fears of
anemic earnings growth and a less supportive Federal Reserve
derailing the longest bull run in U.S. equities. "Until we get to the next earnings season, absent any big
news, investors are probably reluctant to commit a lot of new
capital at these levels, but are also not interested in pulling
back, which leaves markets a bit range-bound," said Meckler.
Apple Inc AAPL.O shares fell about 1% after brokerage
Needham cut its rating to "buy" from "strong buy", saying the
stock outperformed significantly in 2019.
Shares of Boeing Co BA.N dropped 1.2%. A Wall Street
Journal report said the planemaker was considering plans to
raise more debt to bolster its finances after the grounding of
its 737 MAX jet. New York-listed shares of Nio Inc NIO.N jumped 10.7% after
the Chinese electric carmaker reported higher deliveries in
December, compared with the previous month.