Traders wear masks while working on the floor of the New York Stock Exchange as the outbreak of coronavirus disease (COVID-19) continues New York, May 27, 2020.
Lucas Jackson | Reuters
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8:06 am: Bank shares fall when the Fed imposes restrictions on dividends
On Thursday, the Federal Reserve imposed new restrictions on US banks after its annual stress test found that several banks could be uncomfortably close to minimum capital levels in scenarios linked to the coronavirus pandemic. The Fed said in a statement that big banks will have to suspend share buybacks and limit dividend payments to their current level for the third quarter of this year. The regulator also said it would only allow dividends to be paid according to a formula tied to a bank’s recent earnings. Wells Fargo shares fell more than 2% during pre-trade, while JPMorgan and Bank of America fell more than 1%. Goldman Sachs was more than 3% lower. – Son Stevens
7:43 am: Nike falls when company reports surprise loss
Nike shares fell more than 3% during pre-market trading after the company reported a surprise loss for the fourth quarter as sales fell 38% year-over-year. Street analysts had expected the sportswear maker to report a profit of 7 cents a share, but the company lost 51 cents a share. By comparison, in the fourth quarter of 2019, the company earned 62 cents a share. Revenues also fell short as stores were forced to close amid the pandemic. Digital sales increased 75%, but shipping and returns were reduced to margins. – Stevens
7:14: Stock futures point to mixed opening
US stock index futures pointed to a mixed open for the major averages on the last trading day of a volatile week. The Dow Jones industrial average fell 40 points at the open, while the S&P 500 and Nasdaq-100 increased 0.1% and 0.2%, respectively. Bank stocks weighed on the market after the Federal Reserve imposed restrictions on bank dividends after its annual stress test. During Thursday’s session, the sector rebounded after Federal Deposit Insurance Commission officials said they were loosening some restrictions on the Volcker Rule.
Elsewhere in the market, stocks most sensitive to the reopening of the economy, including airlines and cruise lines, rose, despite Texas and Florida pausing their reopening efforts as the number of cases of Covid-19 in the states.
For the week, the S&P and Dow are slated to record their second weekly loss in three weeks, while the Nasdaq Composite is on track to finish the week higher. – Stevens
– With reports from Hugh Son of CNBC.
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