US pre-open: Futures sink despite strong Goldman earnings, jobless claims
Better-than-expected quarterly results from banking group Goldman Sachs were failing to prevent another rout on US stock markets on Thursday with Wall Street futures pointing to another sell-off in pre-market trade.
Not even the news that US jobless claims tumbled to their lowest in over 14 years could stem the decline.
S&P 500 futures were down 0.9% by 08:21 in New York, while those for the Nasdaq dropped 1.1% and those for the Dow Jones Industrial Average fell by another 0.8%.
Global stock markets have tumbled in recent sessions as concerns about global growth, a 'flash crash' in US Treasury yields and soaring bond yields in the European periphery prompted investors to run for cover.
The yield on a benchmark 10-year US Treasury was down a further eight basis points at 2.06% after falling below 2%, and then recovering, on Wednesday for the first time 16 months.
According to analyst Craig Erlam from Alpari UK, at one point on Wednesday the Dow had fallen around 8.6% from its recent highs before recovering slightly before the close, which suggests there may "still be more downside to come".
"Regardless, we’re now close to some very interesting levels because if the indices comfortably surpass the 10% correction mark, it will prompt talk of a much larger correction and even an end to the five-year bull market," he said.
In economic news, initial weekly jobless claims dropped 23,000 to 264,000 in the week to 11 October, the lowest level since April 2000. The consensus forecast was for a rise to 290,000 from 287,000 the week before.
One of the stocks on the Dow to fall early on was Goldman Sachs despite the company saying third-quarter profits surged from $1.5bn to $2.2bn. Earnings per share jumped from $2.88 to $4.57, well ahead of the $3.21 expected by analysts after strong results from its fixed-income, currencies and commodities trading operations. The group also lifted its quarterly dividend by five cents to 60 cents a share.
Sector peers Citigroup, Bank of America, Wells Fargo, Morgan Stanley and JPMorgan Chase & Co were also in the red on Thursday.
Investors were also focusing on comments by Federal Reserve Bank of Philadelphia president Charles Plosser ahead of the opening bell, who said that a rate hike should come "sooner rather than later". Plosser, a voting member of the Federal Open Market Committee, said he wasn't calling for an immediate increase in rates, but said the Fed should change its forward guidance.
A number of other high-profile Fed officials were also due to speak on Thursday, including chair Janet Yellen.