Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues New York, May 27, 2020.
Lucas Jackson | Reuters
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8:06 am: Bank stocks fall as Fed imposes restrictions on dividends
On Thursday the Federal Reserve imposed new restrictions on U.S. banks after its annual stress test found that several banks could get uncomfortably close to minimum capital levels in scenarios tied to the coronavirus pandemic. The Fed said in a release that big banks will be required to suspend share buybacks and cap dividend payments at their current level for the third quarter of this year. The regulator also said that it would only allow dividends to be paid based on a formula tied to a bank’s recent earnings. Shares of Wells Fargo slid more than 2% during premarket trading, while JPMorgan and Bank of America were each down more than 1%. Goldman Sachs was more than 3% lower. – Son, Stevens
7:43 am: Nike drops as company reports surprise loss
Shares of Nike slid more than 3% during premarket 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 per share, but the company instead lost 51 cents per share. By comparison, in the fourth quarter of 2019 the company earned 62 cents per share. Revenue also came up short as stores were forced to close amid the pandemic. Digital sales did jump 75%, but expenses for shipping and returns cut into margins. – Stevens
7:14: Stock futures point to mixed open
U.S. stock index futures pointed to a mixed open for the major averages on the final trading day of a volatile week. The Dow Jones Industrial Average was set to shed 40 points at the open, while the S&P 500 and Nasdaq-100 were set to rise 0.1% and 0.2%, respectively. Bank stocks weighed on the market after the Federal Reserve imposed restrictions on bank dividends following its annual stress test. During Thursday’s session the sector had rallied after the Federal Deposit Insurance Commission officials said they were loosening some restrictions on the Volcker Rule.
Elsewhere in the market, stocks most sensitive to the economy’s reopening, including airlines and cruise lines, moved higher, despite Texas and Florida pausing their reopening efforts as the number of Covid-19 cases in the states jump.
For the week, the S&P and Dow are slated to register their second weekly loss in three weeks, while the Nasdaq Composite is on track to end the week higher. – Stevens
– With reporting from CNBC’s Hugh Son.
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