Futures head lower despite strong showing from US companies

Wall Street declined before the opening bell despite strong earnings from some major U.S. corporations yesterday.

Futures for the Dow Jones industrials fell 0.4% and futures for the S&P 500 slipped 0.3%.

General Motors jumped 4.4% after the automaker reported third-quarter net profit rose 36.7% as vehicle sales rebound from global parts supply chain troubles. Vehicle sales in the U.S. jumped 24%.

Coca-Cola shares climbed nearly 3% after the beverage giant booked stronger-than-expected sales in the third quarter as it hiked prices. It also raised its revenue expectations for the year.

Google’s parent company, along with Facebook’s parent, Amazon and Apple are all reporting their latest financial results this week. They are among the priciest stocks in the benchmark S&P 500 and their earnings this week could mean big moves, up or down, for the broader market.

Investors are looking for indications of inflation’s impact on various industries. Prices on everything from clothing to food remain at their highest levels in four decades, putting pressure on companies to raise prices and cut costs, while squeezing consumers.

The Federal Reserve and central banks around the world have been raising interest rates to tame inflation and those increases have been weighing on pricier stocks, like technology companies, by making less-risky bonds seem more attractive in a volatile stock market.

The Fed is expected to raise interest rates another three-quarters of a percentage point at its upcoming meeting in November.

Economists and investors worry central banks could go too far in slowing economic activity, triggering a recession. They’re looking for any sign they might ease up on rate increases. The U.S. economy has already slowed, contracting during the first half the year.

A report on U.S. consumer confidence is due today [Macau time]. The U.S. government will release its third-quarter gross domestic product report later this week.

In Asia, Hong Kong’s benchmark edged 0.1% lower, to 15,165.59, failing to hold onto early gains after a 6.4% selloff the day before. The Shanghai Composite index fell less than 0.1%, to 2,976.28.

Iris Pang of ING said “most, if not all, existing [China’s] policy decisions has been agreed with Xi. This applies to potential changes in the central bank governor, banking regulator and economic adviser.”

The Chinese yuan slid to a 15-year low of 7.3089 to the U.S. dollar after China’s central bank appeared to ease off trying to counter market forces that were pushing the tightly controlled currency lower. The yuan has declined as U.S. interest rate hikes encouraged banks and other traders to convert money to dollars in search of higher returns.

In September, Chinese commercial banks were instructed by the People’s Bank of China to keep the exchange rate stable and not to bet on the yuan weakening. But after the ruling party’s congress ended over the weekend, the central bank set the yuan’s starting price for trading yesterday unusually low.

Elsewhere in Asia, Tokyo’s Nikkei 225 index rose 1% to 27,250.28, while the Kospi in Seoul lost 0.1%, to 2,235.07. Australia’s S&P/ASX 200 gained 0.3% to 6,798.60. India’s Sensex slipped 0.5%, while Taiwan’s benchmark lost 1.5%.

In other trading, the dollar fell to 148.91 Japanese yen from 148.94 yen. The euro fell to 98.64 cents from 98.75 cents.

Benchmark U.S. crude oil fell $1.25 to $83.33 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing standard, shed $1.19 to $90.02 per barrel. MDT/AP