Dow futures down 50 pts; Netflix to shine after strong subscriber adds

By Peter Nurse

Investing.com -- U.S. stocks are seen opening mixed Friday, with the tech sector set to outperform after strong subscriber numbers from streaming giant Netflix, ahead of more Fed speakers and the release of housing data.

At 06:55 ET (11:55 GMT), the Dow Futures contract was down 50 points, or 0.2%, while S&P 500 Futures traded 3 points, or 0.1% higher, and Nasdaq 100 Futures climbed 50 points, or 0.5%.

The main averages closed lower Thursday, with the blue-chip Dow Jones Industrial Average dropping 250 points, or 0.8%, the broad-based S&P 500 fell 0.8%, while the tech-heavy Nasdaq Composite ended 1% lower.

All three indexes are on track to close the week lower on fears of an economic slowdown along with worries over the Federal Reserve keeping interest rates higher for longer. The DJIA is down 3.7% so far this week, on track for its worst week since September. The S&P 500 is down more than 2.5%, while the Nasdaq is just over 2% lower.

Economic data this week has generally disappointed, while Federal Reserve Bank of New York President John Williams said Thursday the U.S. central bank has more rate hikes ahead, adding to the list of Fed speakers who have stressed the need for more monetary tightening.

There are more Fed policymakers scheduled to speak Friday, including Patrick Harker and Christopher Waller. Investors will be watching to see if they drop any hints about their thinking coming into the February rate decision.

The economic data slate thins out Friday, with the main release being existing home sales data, at 10:00 ET (15:00 GMT). Analysts expect sales to fall 5.4% in December from the prior month, when sales fell 7.7%.

That said, the tone Friday is seen slightly more optimistic, with Netflix (NASDAQ:NFLX) seen trading sharply higher premarket after the streaming service picked up more subscribers than expected - some 7.7 million - at the end of last year, providing a rare piece of positive corporate news.

Alphabet (NASDAQ:GOOGL) is also seen trading higher premarket after the parent of Google, announced that it would cut about 12,000 jobs or about 6% of its staff, the largest ever layoffs from the company.

This is likely to help the tech sector outperform, while the retail sector will be hit after Nordstrom (NYSE:JWN) cut its annual profit forecast after the close Thursday on the back of weak holiday sales despite heavy discounting.

Quarterly earnings are also expected from the likes of State Street (NYSE:STT), Schlumberger (NYSE:SLB), and Regions Financial (NYSE:RF).

Oil prices rose Friday, on course for a second straight positive week, on continued optimism that the brightening outlook for the Chinese economy will result in increased demand from the world’s largest crude importer.

Both the Organization of Petroleum Exporting Countries and the International Energy Agency forecast, in monthly reports earlier this week, that a Chinese economic recovery will spur record-high crude demand in 2023.

This confidence has helped the market look past data showing a bigger-than-expected build in U.S. inventories, after the Energy Information Administration reported an increase of over 8 million barrels on Thursday.

By 06:55 ET, U.S. crude futures traded 0.3% higher at $80.83 a barrel, while the Brent contract rose 0.2% to $86.34 per barrel.

Additionally, gold futures rose 0.3% to $1,929.30/oz, while EUR/USD edged higher to 1.0829.