Here are five things you must know for Thursday, July 15:
1. -- Stock Futures Fall After Powell Says Fed Not Ready to Taper
Stock futures were mostly lower Thursday, a day after Federal Reserve Chairman Jerome Powell told lawmakers it was too early for the central bank to pull back on economic support even though inflation has been rising quicker than expected.
Asian shares finished Thursday's session mixed after China’s economic growth slowed in the second quarter but at a still-robust 7.9%.
Contracts linked to the Dow Jones Industrial Average fell 203 points, S&P 500 futures were down 16 points and Nasdaq futures rose 8 points.
Stocks closed mostly higher Wednesday after Powell said in congressional testimony the Fed wasn't ready to scale back on its support since the U.S. economy has a ways to go before recovering.
Powell also reiterated - as he has many times before - that rising prices pressures will be temporary and will moderate through the end of the year.
“Investors right now are focusing on earnings because they are still buying what the Fed is saying about inflation (and) that it’s too early to start to raise rates and potentially slow a reopening economy,” said Sam Stovall, chief investment strategist at CFRA.
Powell will resume his testimony Thursday before the Senate.
The yield on the benchmark 10-year Treasury extended recent declines, falling to 1.317% on Thursday.
2. -- Thursday's Calendar: More Powell Testimony, Morgan Stanley Earnings
The economic calendar in the U.S. on Thursday includes Federal Reserve Chairman Jerome Powell's semi-annual report on the U.S. economy to the Senate Committee on Banking, Housing and Urban Affairs at 9:30 a.m. ET.
Thursday's calendar also includes weekly Jobless Claims at 8:30 a.m., the Philadelphia Fed Manufacturing Index for July at 8:30 a.m., the Empire State Manufacturing Index for July at 8:30 a.m., Import and Export Prices for June at 8:30 a.m. and Industrial Production for June at 9:15 a.m.
UnitedHealth (UNH) reported second-quarter earnings and revenue that topped analysts' expectations and the healthcare insurer raised its full-year outlook.
Morgan Stanley (MS) earned $1.85 a share in the second quarter, ahead of estimates of $1.66.
3. -- NortonLifeLock Is in Talks to Buy Avast
NortonLifeLock (NLOK) is in advanced talks to buy cybersecurity firm Avast in a cash-and-stock deal.
Avast said the two companies were in advanced discussions after The Wall Street Journal reported on the talks Wednesday.
A deal could be completed this month, people familiar with the matter told the Journal. Avast has a market value of around $7.2 billion, and assuming a typical deal premium the deal could value the Prague-based cybersecurity company at more than $8 billion, the Journal noted.
NortonLifeLock will have to make an offer for Avast before Aug. 11, according to U.K. takeover rules.
“A combination of NortonLifeLock and Avast would bring together two companies with aligned visions, highly complementary business profiles and a joint commitment to innovation that helps protect and empower people to live their
digital lives safely,” NortonLifeLock said in a statement.
Shares of Avast, which are listed in London, jumped more than 12% on Thursday. NortonLifeLock shares were down 1.9% in premarket trading to $26.40.
4. -- Netflix Plans Expansion Into Video Games
Netflix (NFLX) was rising nearly 3% in premarket trading Thursday after the streaming giant said it was planning to expand into video games.
The company has hired Mike Verdu, a former executive at Electronic Arts (EA) and Facebook (FB) to lead the effort. At Facebook, Verdu was in charge of working with developers to bring games and other content to Oculus virtual-reality headsets.
Verdu's title at Netflix will be vice president of game development.
The company's plan is to offer video games on its streaming
platform within the next year, a person familiar with the situation told Bloomberg. The games will appear alongside current programming.
Netflix doesn’t currently plan to charge extra for the content, the person said.
Netflix rose 2.64% to $562.43 in premarket trading. Shares of GameStop (GME) , the video-game retailer, tumbled more than 3%.
5. -- J&J Recalling Neutrogena and Aveeno Spray Sunscreens
Johnson & Johnson (JNJ) said it was voluntarily recalling all lots of five spray sunscreen product lines, including Neutrogena and Aveeno, after testing revealed benzene in some product samples.
The company told consumers to stop using the products immediately.
The aerosol products are Neutrogena Beach Defense aerosol sunscreen, Neutrogena Cool Dry Sport aerosol sunscreen, Neutrogena Invisible Daily defense aerosol sunscreen, Neutrogena Ultra Sheer aerosol sunscreen, and Aveeno Protect + Refresh aerosol sunscreen.
Benzene is classified as a human carcinogen, a substance that could potentially cause cancer depending on the level and extent of exposure. J&J said that benzene isn't an ingredient in any of its sunscreen products but it was detected in some samples of the impacted aerosol sunscreen finished products.
The company said it was investigating the cause.
Shares of Johnson & Johnson fell 0.41% to $169.72 in premarket trading Thursday.