Oil slide dents futures ahead of bank earnings

By Medha Singh

(Reuters) – U.S. stock index futures retreated on Wednesday for a second time this week, as a slide in oil prices pressured energy stocks ahead of what is expected to be another dismal round of first-quarter earnings reports.

UnitedHealth Group Inc , the biggest U.S. health insurer, reported a fall in quarterly profit, but its shares rose 2.6% in premarket trading as it maintained its 2020 profit outlook at a time when major companies have withdrawn forecasts due to the coronavirus pandemic.

J.C. Penney Co Inc slumped 14.7% as sources said the retailer was exploring filing for bankruptcy protection after the virus outbreak upended its turnaround plans.

JPMorgan Chase & Co and Wells Fargo & Co kicked off the earnings season on Tuesday by reporting a slump in quarterly profits and setting aside billions of dollars to cover potential loan defaults.

With dire forecasts of the biggest economic slump this year since the Great Depression, analysts expect earnings for S&P 500 firms to slide 12.3% in the first quarter and 23.6% in the second, according to IBES estimates from Refinitiv.

The benchmark S&P 500 <.spx> index has climbed about 30% from its March trough, lifted by a raft of U.S. monetary and fiscal stimulus and on early signs that coronavirus cases were peaking in some hotspots, but is still down about 16% from its record high.

The index jumped 3% on Tuesday on hopes the Trump administration could move to ease lockdowns as the outbreak showed signs of ebbing. However, hotspot New York later sharply raised its official virus death toll to more than 10,000.

Oil majors Exxon Mobil Corp and Chevron Corp slipped about 3% as oil prices tumbled, pressured by reports suggesting persistent oversupply and collapsing global demand. [O/R]

Bank of America , Goldman Sachs and Citigroup Inc fell between 0.9% and 2% before the release of their financial results later in the day.

At 06:22 a.m. ET, Dow e-minis were down 399 points, or 1.67%, S&P 500 e-minis were down 53 points, or 1.86% and Nasdaq 100 e-minis were down 118.25 points, or 1.36%.

SPDR S&P 500 ETFs were down 1.6%.

(Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta)