Technology Shares Slide as Energy Rallies

Technology stocks are selling off again today following disappointing earnings from Amazon.com and disappointing guidance from Intel. Their shares are down 6.6% and 25.3%, respectively, in premarket action.

Energy contracts are rallying on speculation that hostilities in the Middle East could increase again following next week’s US midterm elections. Meanwhile, US energy giants are climbing, with high energy prices propelling strong earnings.

The Bank of Japan held its benchmark interest rate at 1.25%. Japan retail sales came in below expectations at 2.3% versus Street 3.3%. Canada August GDP was steady but softer than expected at 0.0% versus Street 0.2%, while Eurozone Q3 GDP exceeded expectations at 1.3% versus Street 1.1%.

Amazon.com ($1.89 v. Street $1.97) posted disappointing results. Chevron ($5.28 v. Street $4.87) and ExxonMobil ($4.23 v. Street $4.12) beat expectations and are up 1.5% and 1.6%, respectively, in premarket trading. Ford Motor ($0.49 v. Street $0.41), Intel ($0.52 v. Street $0.41) and Starbucks ($0.80 v. Street $0.72) also beat expectations.

Results from Canadian companies came in stronger than expected overall, with headliners including Air Canada ($0.53 v. Street $0.34), Aecon Group ($0.60 v. Street $0.51) and Methanex ($3.63 v. Street $2.84).

NASDAQ futures are down 2.5%, while Dow futures are steady. In Asia, the Nikkei fell 2.1%, the Hang Seng gained 1.5% and the KOSPI dropped 3.5%. In Europe, the DAX is down 0.7% and the FTSE is up 0.1%.

Crude Oil is up 1.9%, trading above $100.00/bbl, while Brent Crude has gained 2.3% to trade above $117.50/bbl. Gasoline is up 0.4%, trading near $3.20/gallon. Gold is down 1.4%, falling below $4,000/oz, Copper is down 1.4%, falling toward $6.50/lb, and Silver has dropped 4.2%.

The US 10-year Treasury note yield is falling below 5.00%, while the US 30-year Treasury note yield is falling below 5.30%. The US Dollar Index is down 0.2%, the Euro is down 0.1% and the Loonie is up 0.3%.

Looking ahead, US Chicago PMI is due at 9:45 am EDT. Monday brings Manufacturing PMI reports from around the world.

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