US STOCKS-Wall St set for lower open as trade truce rally fades, UnitedHealth falls

Reuters
05-15
US STOCKS-Wall St set for lower open as trade truce rally fades, UnitedHealth falls

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Futures down: Dow 0.27%, S&P 500 0.31%, Nasdaq 0.46%

Cisco gains after raising FY forecasts

UnitedHealth down after report firm facing criminal probe

Updates before markets open

By Shashwat Chauhan and Pranav Kashyap

May 15 (Reuters) - Wall Street's main indexes were on track to open lower on Thursday as euphoria from the U.S.-China tariff truce waned, while UnitedHealth's stock was pressured following a report that the DoJ was investigating the health insurer for fraud.

UnitedHealth Group UNH.N dropped 7.3% after the Wall Street Journal reported that the U.S. Department of Justice was conducting a criminal investigation into the company for possible Medicare fraud. The insurer said it had not been informed of a criminal probe by federal prosecutors.

Walmart WMT.N will have to start raising prices later this month due to the high cost of tariffs, executives said, even as the retail giant's U.S. comparable sales surpassed expectations in the first quarter. Its shares were trading flat.

At 08:46 a.m. ET, Dow E-minis YMcv1 were down 115 points, or 0.27%, S&P 500 E-minis EScv1 were down 18.5 points, or 0.31%, and Nasdaq 100 E-minis NQcv1 were down 97.5 points, or 0.46%.

Speaking on the day, U.S. Federal Reserve chair Jerome Powell said central bank officials felt they needed to reconsider the key elements around jobs as well as inflation in their current monetary policy approach.

In economic data, U.S. retail sales growth slowed in April, while a Labor Department report showed the producer price index for final demand fell 0.5% for the same month, compared to an expectation of a 0.2% rise.

On an annual basis, producer prices came in at 2.4% versus an estimate of 2.5%.

"This is not enough to shift the scales for the Fed on its own," said Jan Nevruzi, U.S. rates strategist at TD Securities.

"Policy from the government's side has been changing rapidly, so on the back of that they're willing to give these economic figures (time) to develop."

The data dump follows a relatively tame consumer price reading earlier this week, indicating that consumer prices rebounded moderately last month.

In results-driven moves, Cisco Systems CSCO.O gained 2.9% after the networking-equipment maker raised its annual forecasts and named Mark Patterson its new CFO.

The week has proved to be a roller-coaster ride for stocks, as equities surged on Monday and Tuesday after the United States and China agreed to a 90-day pause on their heated tariff dispute.

These initial advances pushed the S&P .SPX into positive territory for the year, a first since late February, although the index still hovers about 4% below its all-time highs.

However, the rally hit a roadblock in the last session as markets sought fresh catalysts. The S&P 500 eked out marginal gains, while the Dow .DJI finished in the red.

Many megacap and growth stocks - which had enjoyed strong gains earlier in the week - pulled back. Nvidia's NVDA.O shares fell 0.8% and Tesla TSLA.O lost 1.8%.

Other major movers included Foot Locker FL.N, which soared 83.2% after rival Dick's Sporting Goods DKS.N agreed to buy the footwear retailer for $2.4 billion.

Top oil producers Chevron CVX.N and Exxon Mobil XOM.N dropped about 1% each as oil prices slid around 3% on expectations of a U.S.-Iran nuclear deal that could result in sanctions easing.

(Reporting by Shashwat Chauhan and Pranav Kashyap in Bengaluru, Additional reporting by Rashika Singh; Editing by Saumyadeb Chakrabarty and Pooja Desai)

((Shashwat.Chauhan@thomsonreuters.com;))

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