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US STOCKS-Rotation out of megacaps drags Nasdaq futures lower

Tue 4th May, 2021 12:07pm
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
    * Futures: Nasdaq down 0.34%, Dow up 0.06%, S&P off 0.08% 

    By Shreyashi Sanyal
    May 4 (Reuters) - U.S. stock index futures dipped on Tuesday
as investors continued to move out of megacap growth stocks and
into companies that are expected to benefit more from the
reopening of economies.
    Highly valued technology companies including Microsoft Corp
 MSFT.O , Alphabet Inc  GOOGL.O , Apple Inc  AAPL.O , Amazon.com
Inc  AMZN.O  and Facebook Inc  FB.O  fell between 0.2% and 0.5%
in premarket trading.
    Big U.S. banks such as Goldman Sachs Group Inc  GS.N  and
Wells Fargo & Co  WFC.N  added 0.7% and 0.4%, respectively,
while planemaker Boeing Co  BA.N  and oil major Chevron Corp
 CVX.N  gained 0.8% each.
    Copious stimulus measures, speedy vaccination drives and the
Federal Reserve's accommodative policy stance have spurred a
strong rebound in the U.S. economy and pushed Wall Street to
record highs this year. The so-called "pandemic winners",
however, have recently started to fall out of favor.
    "While megacap tech companies have been a core part of the
solid performance of portfolios throughout the pandemic, we
think investors should be careful to avoid overallocation to
this part of the market," Mark Haefele, chief investment officer
at UBS Global Wealth Management, wrote in a client note.
    "In an environment of accelerating growth, we continue to
prefer cyclical and value sectors such as financials and
energy."
    At 6:36 a.m. ET, Dow e-minis  1YMcv1  were up 22 points, or
0.06%, S&P 500 e-minis  EScv1  were down 3.25 points, or 0.08%,
and Nasdaq 100 e-minis  NQcv1  were down 47 points, or 0.34%.
    Among other stocks, Dupont de Nemours Inc  DD.N  rose 0.9%
after the industrial materials maker raised its full-year profit
and revenue forecasts and beat first-quarter expectations.
 urn:newsml:reuters.com:*:nL4N2MQ3AT
    First-quarter earnings have been largely upbeat. Average
profits at S&P 500 companies are expected to have risen 46% in
the quarter, compared with forecasts of a 24% growth at the
start of April, according to IBES data from Refinitiv.
    Investors also awaited important data points through the
week, including the Labor Department's non-farm payrolls data,
slated to be released on Friday. The report is expected to show
a rise in job additions in April.

 (Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru;
Editing by Saumyadeb Chakrabarty)
 ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961
144 3740; Twitter: https://twitter.com/s_shreyashi;))
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