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Index futures signal a positive start to Australian trade despite losses on Wall Street as traders took profits ahead of a big week of US corporate earnings.

ASX SPI200 index futures climbed 20 points or 0.4 per cent after BHP and Rio Tinto rose in overseas trade and a huge after-market rebound in Google parent company Alphabet offset an end to Wall Street’s four-session winning run.  

The S&P 500 gave up strong early gains to finish 15 points or 0.52 per cent in the red. The tech-heavy Nasdaq bore the brunt of the selling, falling 122 points or 1.4 per cent. The tech-lite Dow declined a modest 32 points or 0.13 per cent.

Investors appeared in no mood to hold stocks into this week’s earnings reports. Four of the five largest US stocks by market capitalisation – Microsoft, Alphabet, Facebook and Amazon – all shed at least 2.4 per cent. The fifth, Apple, gave up 1.6 per cent. Alphabet fell 3 per cent in regular trade, then clawed it all back with a bounce of 6.4 per cent in after-hours trade as news of stronger-than-expected YouTube ad sales offset an earnings miss.

“People are selling into the tech earnings,” Peter Cardillo, chief market economist at Spartan Capital Securities in the US, told CNBC. “If those results disappoint, then those stocks can lead the market lower.”

The broader market was pressured by a record plunge in consumer confidence, wild swings in oil markets and a warning that the death toll from COVID-19 could be significantly higher if states re-open too soon. A measure of confidence in the economy plunged even more than economists expected as 26 million Americans were thrown out of work.

The market rallied earlier in the week amid optimism that the economy was restarting as several states announced plans to wind back lockdown restrictions imposed to stop the spread of COVID-19. Some of that optimism leaked after White House health adviser Dr Anthony Fauci said re-opening prematurely could “get us right back in the same boat that we were in a few weeks ago”. Fauci said he was cautiously optimistic that researchers will develop a vaccine, but the virus was “not going to disappear from the planet”.

Energy was the best-performing sector, rising 2.2 per cent after reports of a bomb attack on a Syrian oil tanker triggered a massive reversal in oil. West Texas Intermediate crude swung from US$10.07 to US$13.69 before settling 44 cents or 3.4 per cent in the red at US$12.34 a barrel. The reversal continued two weeks of extreme gyrations in crude markets. Brent crude settled 47 cents or 2.4 per cent ahead at US$20.46 a barrel.

Australian mining heavyweights BHP and Rio Tinto benefitted from a 2 per cent rise in the US materials sector. BHP’s US-listed stock put on 1.11 per cent and its UK-listed 1.28 stock per cent. Rio Tinto edged up 0.15 per cent in the US and 0.31 per cent in the UK. The spot price for iron ore landed in China dipped $1 or 1.2 per cent to US$82.40 a dry ton.

Gold dipped for a third straight night, but losses were cushioned by soft consumer confidence data. Gold for June delivery settled $1.60 or 0.1 per cent weaker at US$1,722.20 an ounce after dropping as low as US$1,704.10.

The dollar continued to climb towards 65 US cents, lately up less than 0.1 per cent at 64.91 US cents.

The S&P/ASX 200 has battled grim news from the financial sector all week as two of the big four banks announced heavy impairments for bad loans. The benchmark index eased 0.16 per cent yesterday.

The day ahead brings quarterly updates from Coles, Regis Resources and Iluka, followed by quarterly inflation figures at 11.30 am EST. Wall Street has preliminary quarterly GDP data and a policy statement from the Federal Reserve at the end of its two-day meeting. One of the heaviest nights of the reporting season brings updates from Microsoft, Facebook, Boeing, Tesla, GE, eBay and Royal Caribbean Cruises.

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