Futures Tumble as Banks Fail Stress Tests



U.S. stock futures fell before the opening bell Friday following the release of the Federal Reserve’s latest bank stress-test results and disappointing quarterly numbers out of Nike.

Futures for Dow Jones Industrials faltered 125 points, or 0.5%, early Friday, to 25,471.

Futures for the S&P 500 erased five points, or 0.2%, to 3,065.75.

Futures for the NASDAQ Composite Index let go of five points, or 0.1%, to 10,083.25.

The moves came after the Fed’s annual stress test of the major banks showed some banks could get close to minimum capital levels in scenarios related to the coronavirus pandemic. Because of this, banks must suspend share repurchase programs and keep dividend payments at current levels for the third quarter.

The announcement sent some bank shares lower in after-hours trading. Bank of America and JPMorgan Chase both dipped more than 1.5%. Wells Fargo slid 2.7% and Goldman Sachs fell 3.1%. Bank stocks were coming off sharp gains, rallying more than 3% during regular trading Thursday.

Meanwhile, Nike shares slid 3% after the bell on the back of a surprising quarterly loss for the apparel giant.

The company reported a loss of 51 cents per share and revenue of $6.31 billion for its fiscal fourth quarter. Nike’s quarterly revenue reflected a drop of 38% on a year-over-year basis.

Thursday, the major averages, struggled for direction for most of Thursday’s session as the number of coronavirus cases keeps rising in certain states. Florida reported just over 5,000 additional cases. Arizona’s cases jumped by 5.1%, topping a seven-day average of 2.3%.

Texas Gov. Greg Abbott said the state would pause its reopening plans given the recent spike in cases and hospitalizations.

Overseas, in Tokyo, the Nikkei 225 barreled ahead 1.1% Friday, while in Hong Kong, the Hang Seng index settled back 0.9%.

Oil prices fell 21 cents at $38.51 U.S. a barrel.

Gold prices dipped two dollars to $1,772.60.