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Disney shares slide
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Tapestry jumps on profit outlook
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Futures: Dow down 0.36%, S&P off 0.09%, Nasdaq up 0.21%
By Shreyashi Sanyal and Shristi Achar A May 11 (Reuters) - The Dow and the S&P 500 were set to open lower on Thursday, pressured by a drop in Disney shares after the company reported a fall in subscriber growth, while PacWest set off another rout in shares of regional banks.
Walt Disney Co slid 6% in premarket trading after its quarterly report on Wednesday. Streaming giant Netflix Inc's shares were also down 0.7%.
A Labor Department report showed Producer Price Index (PPI) rose 2.3% in April from a year earlier, slightly below expectations of a 2.4% increase. Another report showed the number of Americans filing new claims for jobless benefits jumped last week to the highest level since late 2021, suggesting that higher interest rates were starting to weigh on the labor market. Investors are looking for more signs of cooling inflation as they hope for a pause in the Federal Reserve's rate-hike campaign. "Jobless claims obviously moved up, that is pointing to a weakening labor market. But the big story of the day is that PPI came in on a year-to-year basis better than expected," said Peter Cardillo, chief market economist at Spartan Capital Securities. "However, the good inflation news is being somewhat clouded by the PacWest Bank's news situation. The fear factor is driving the market.. the fact that deposits went down."
PacWest Bancorp plunged 20.7% after it reported a drop in deposits last week and pledged an additional $5.1 billion of its loans to the central bank.
At 8:46 a.m. ET, Dow e-minis were down 121 points, or 0.36%, S&P 500 e-minis were down 3.75 points, or 0.09%, and Nasdaq 100 e-minis were up 28 points, or 0.21%. Nasdaq futures got a lift from Alphabet Inc shares, that extended gains to rise 2.5% after Google rolled out more artificial intelligence products on Wednesday to take on competition from Microsoft Corp . Any updates on raising the United States' $31.4 trillion debt ceiling were also being watched by investors, as the country races to avert an unprecedented default. U.S. Treasury Secretary Janet Yellen urged Congress to raise the federal debt limit and warned that a default could have severe repercussions on the global economy and risked undermining U.S. global economic leadership.
Tapestry Inc rose 9.0% as it raised its annual profit forecast.
(Reporting by Shreyashi Sanyal and SHristi Achar A in
Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D'Silva)
