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Wall St set for flat open as Middle East jitters ease, Netflix slumps

Published 2024-04-19, 05:44 a/m
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., April 1, 2024. REUTERS/Brendan McDermid/File Photo
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By Shashwat Chauhan and Shristi Achar A

(Reuters) -Wall Street's main indexes eyed a flat open on Friday as initial jitters about an escalation in the Middle East conflict subsided, while Netflix (NASDAQ:NFLX) dropped after forecasting current-quarter revenue below estimates.

Explosions echoed over an Iranian city on Friday in what sources described as an Israeli attack, but Tehran played down the incident and indicated it had no plans for retaliation - a response that appeared gauged towards averting a region-wide war.

"Once the details were released, the markets were relieved and as you can see, the markets are off their lows," said Peter Cardillo, chief market economist at Spartan Capital Securities.

"As far as the conflict is concerned, that is always going to be a worry factor for the market. The earnings are more of a fundamental than the geopolitical concerns."

Netflix slumped 6.4% in premarket trading following the streaming video pioneer's lackluster second-quarter forecast.

Shares of other streaming services providers such as Walt Disney (NYSE:DIS) and Roku (NASDAQ:ROKU) retreated 0.7% and 1.2%, respectively.

The S&P 500 and the Nasdaq closed lower for the fifth straight session on Thursday, as economic data and comments from Fed officials suggested that the U.S. central bank was unlikely to cut interest rates in the near future.

Federal Reserve policymakers have coalesced around the idea of keeping borrowing costs where they are until perhaps well into the year, given slow and bumpy progress on inflation, and a still-strong U.S. economy.

Equities were rattled this week as investors readjusted their expectations over by how much the Fed would cut rates this year, with both the S&P 500 and the blue-chip Dow poised for a third weekly decline, while the Nasdaq was set for its fourth consecutive weekly loss, if current trend holds.

Money markets are now pricing in about 39 basis points (bps) of cuts from the central bank this year, down from around 150 bps seen at the beginning of 2024, according to LSEG data.

U.S. stocks suffered an outflow of $4.1 billion in the latest week, according to Bank of America (NYSE:BAC)'s weekly 'Flow Show' report, their largest two-week outflow since December 2022.

The CBOE Volatility index, also known as Wall Street's "fear gauge", was last up 0.61 points at 18.61 after breaching the psychologically important level of 20 earlier in the session.

At 8:31 a.m. ET, Dow e-minis were down 3 points, or 0.01%, S&P 500 e-minis were up 1.75 points, or 0.03%, and Nasdaq 100 e-minis were down 15.25 points, or 0.09%.

Shares of Paramount Global (NASDAQ:PARA) jumped 8.3% after a person familiar with the matter told Reuters that Sony Pictures Entertainment and Apollo Global Management are discussing making a joint bid for the company.

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., April 1, 2024. REUTERS/Brendan McDermid/File Photo

Procter & Gamble (NYSE:PG) slipped 1.6% after the consumer goods giant missed third-quarter net sales estimates.

Ulta Beauty (NASDAQ:ULTA) fell 1.4% after Jefferies downgraded the cosmetics retailer to "hold" from "buy".

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