Wall Street set to edge lower at open as energy stocks slip

(Reuters) – Wall Street’s main indexes were set to open slightly lower on Friday as energy stocks slipped while investors booked profits after a rally on bets of fiscal stimulus and a vaccine-fueled bounce back in the economy.

FILE PHOTO: Traders wearing masks work,on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid/File Photo

Chevron Corp, Occidental Petroleum Corp and Exxon Mobil Corp dipped between 0.5% and 1.1% in premarket trading as oil prices retreated on demand fears. [O/R]

U.S. President Joe Biden will meet with a bipartisan group of mayors and governors on Friday as he continues to push for approval of a $1.9 trillion coronavirus relief plan.

All three major indexes hit record highs this week and were on course for their second straight weekly rise, as a sharp drop in new COVID-19 cases and hospitalizations also buoyed hopes of life eventually returning to normal.

U.S. stock markets will be closed on Monday on account of George Washington’s Birthday.

“The markets have gone up tremendously,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

“It’s going to be a long weekend and it’s going to make things more volatile and there is just less interest in buying more.”

A Reuters poll showed the U.S. economy is expected to reach pre-COVID-19 levels within a year as the proposed $1.9 trillion fiscal package helps boost economic activity, but it’s likely to take over a year for unemployment to fall to early 2020 levels.

With the markets near historic highs, many analysts have cautioned of a near-term pullback, with new coronavirus variants and bumps in vaccine distribution posing as threats.

At 8:17 a.m. ET, Dow E-minis were down 28 points, or 0.09% and S&P 500 E-minis were down 6.25 points, or 0.16%. Nasdaq 100 E-minis were down 14.75 points, or 0.11%.

Largely upbeat earnings update have also supported market sentiment. About 82% of 355 S&P 500 firms have topped analysts’ estimated for fourth-quarter profit, well above the average beat rate of 76% over the past four quarters, per Refinitiv data.

Walt Disney Co rose 1.4% after the company swung to a surprise quarterly profit as “The Mandalorian” and “Soul” lifted its fast-growing streaming business, outweighing pandemic worries about its hobbled theme park operations.

PayPal Holdings Inc rose 3% as several brokerages raised price targets on the stock a day after the payments company’s investor day call.

Economic data at 10 a.m. ET (1500 GMT) is expected to show that a reading on the University of Michigan’s consumer sentiment index edged up to 80.8 in February from 79 in January.

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