*
Skyworks, Paypal drop on downbeat forecasts
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U.S. debt ceiling talks due later in the day
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Futures down: Dow 0.35%, S&P 0.36%, Nasdaq 0.40%
By Shreyashi Sanyal
May 9 (Reuters) - U.S. stock index futures were lower on
Tuesday, with dour earnings forecasts from Apple supplier
Skyworks and payments firm PayPal weighing on sentiment, while
investors focused on a debt-ceiling deadlock.
Regional bank shares, which failed to hold on to their
short-lived bounce a day earlier, extended declines, with
Pacwest Bancorp falling 12.6% and Western Alliance dropping 5.9%.
Markets are waiting for an update on the debt ceiling from a
meeting between U.S. President Joe Biden, Republican House
Speaker Kevin McCarthy and other congressional leaders at the
White House later in the day.
Worries of a potential government default loom over
Washington as early as June 1, if Congress does not act to
resolve the deadlock.
The data-packed week will see the release of the much-awaited inflation report on Wednesday. The Labor Department's consumer price index (CPI) is expected to climb 0.4% in April after gaining 0.1% in March.
Reports on producer prices, weekly jobless claims and
consumer sentiment are all lined up for the week.
"Last week's jobs report appeared to have something for
every optimist - indicating that the labor market is slowing,
showing Fed policy is pushing in the right direction," said
Susannah Streeter, head of money and markets, Hargreaves
Lansdown.
"The feel-good factor has fizzled out as investors play
a waiting game for the next slice of data on the economy, while
worries about the U.S. defaulting on its debts edge higher
again."
At 6:51 a.m. ET, Dow e-minis were down 118 points, or 0.35%, S&P 500 e-minis were down 14.75 points, or 0.36%, and Nasdaq 100 e-minis were down 53.25 points, or 0.4%. Among stocks, chip-gear maker Skyworks Solutions Inc's shares tumbled 10% in premarket trading after forecasting current-quarter revenue and earnings below estimates.
Investors were optimistic about Skyworks after Apple Inc's strong quarterly showing on Thursday. Shares of other Apple suppliers including Qualcomm and Qorvo fell 0.6% and 1.5%, respectively.
PayPal Holdings dropped 4.8% after a cut to its margin forecast.
Novavax added 8.5% as the drugmaker plans a 25% cut to its global workforce.
Wall Street's three main indexes ended the previous
session flat, but growth-oriented Nasdaq 100 index touched a more than eight-month high, while the NYSE FANG+TM
index jumped to its highest since April 2022.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ LPL's Debt ceiling sell-off graphic: April-Oct 2011 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru; Editing by Sonia Cheema and Anil D'Silva)
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