Futures contracts tied to the major U.S. equity indexes fell in early trading Wednesday as weak earnings and tumbling oil prices threatened to erase the market’s gains since Monday.
Futures for Dow Jones Industrials fell back 421 points, or 1.8%, early Wednesday to 23,466.
Futures for the S&P 500 dropped 58 points, or 2%, at 2,785.
Futures for the NASDAQ Composite collapsed 115.5 points, on 1.3%, to 8,577.50.
Banks, among the first major companies to report first-quarter results, gave an early look at the damage the coronavirus downturn is set to do to corporate earnings. The major banks have all reported 40%-plus declines in earnings as they set aside billions to cover what they see as major upcoming losses on loans, credit cards and mortgages.
Bank of America reported weaker-than-expected earnings, sending the stock down more than 3% in pre-market trading. The banking giant said its first-quarter profit fell 45% as its loan-loss reserves grew by $3.6 billion because of the coronavirus outbreak.
Goldman Sachs shares also dipped more than 2% after the bank reported a 46% decline in first-quarter profit as the coronavirus whacked performance in its asset-management division. CEO David Solomon said the bank’s profitability was “inevitably affected by the economic dislocation.”
Citigroup, too, said it saw first-quarter income slide 46% as it set more funds aside to protect itself from potential missed payments from borrowers and other loan holders.
Earnings per share of $1.05 came in well below those Citi reported one year ago, when it reported $1.87 in the first quarter of 2019. Citi stock fell 3% in the premarket session following its financial report.
Analysts expect S&P 500 earnings growth to decline 10.2% in the first quarter year-over-year. For the first quarter, 88 negative earnings pre-announcements have been issued by S&P 500 corporations. A wave of major companies has already withdrawn their full-year guidance.
Overseas, in Japan, the Nikkei 225 gave up 0.5% Wednesday, while in Hong Kong, the Hang Seng Index dropped 1.2%.
Oil prices slid 47 cents to $19.64 U.S. a barrel.
Gold prices let go of $20.00 to $1,748.90 U.S. an ounce.