Dow Futures, Jobs, DocuSign, Google - 5 Things You Must Know Friday

Stock futures fluctuate following Wall Street's worst day since June; investors await key monthly U.S. jobs data; DocuSign posts an earnings beat but the stock slides.
Author:
Updated:
Original:

Here are five things you must know for Friday, Sept. 4:

1. -- Stock Futures Fluctuate Following Wall Street Rout

Stock futures fluctuated Friday following Wall Street's worst day since June as investors awaited U.S. jobs data and a three-day holiday weekend.

Contracts linked to the Dow Jones Industrial Average rose 34 points, S&P 500 futures were down 8 points and Nasdaq futures fell 163 points.

Stocks declined the most since early June on Thursday as tech shares such as Apple  (AAPL) - Get Report, Amazon.com  (AMZN) - Get Report and Tesla  (TSLA) - Get Report - the darlings of the recent rally - slumped sharply.

The Dow fell 811 points, or 2.8%, to 28,290, the S&P 500 slid 3.5% and the tech-heavy Nasdaq dropped 5%.

“Putting (Thursday's) market pullback in context, this takes the S&P 500 all the way back to where it was - wait for it - last Wednesday," said Greg McBride, Bankrate.com's chief financial analyst. "Markets go up and down, not just up as we’ve seen lately. Volatility is normal and investors should be braced for more of it as we head closer to the election, and with valuations at high levels.”

Before Thursday's rout, the S&P 500 had risen nine out of the previous 10 sessions.

“A market correction - whenever one might materialize - is often a precursor to further advances," McBride added. "Maintain your long-term perspective and if your portfolio is more heavily tilted toward stocks than you intended, take the opportunity to rebalance.”

2. -- Friday's Highlights: Jobs Report

The economic calendar in the U.S. Friday includes the official U.S. jobs report for August, the most closely watched economic indicator of any month.

Economists surveyed by FactSet expect the U.S. to have added 1.4 million jobs in August, with an unemployment rate of 9.8%, down from 10.2% in July.

Nonfarm payrolls rose to 1.763 million in July vs. a stronger number in June of 4.791 million.

A private payrolls report earlier this week showed U.S. companies hired only 428,000 workers in August, well below the 975,000 expected from economists.

The report from ADP illustrated how businesses continue to struggle to reopen and re-hire amid the coronavirus pandemic that has now stretched to six months.

3. -- Broadcom Expects a Wireless Rebound

Chipmaker Broadcom  (AVGO) - Get Report posted fiscal-third quarter earnings that beat Wall Street forecasts, driven by demand from cloud and telecom customers, and said it expects its wireless business to rebound in the fourth quarter.

The stock was down 1.16% in premarket trading to $348.

Adjusted earnings in the third quarter were $5.40 a share, higher than analysts' expectations of $5.22 a share. Revenue of $5.82 billion from from $5.52 billion a year earlier and topped forecasts of $5.76 billion,

For the fiscal fourth quarter, Broadcom said it expects revenue of $6.25 billion to $6.55 billion, ahead of forecasts of $6.18 billion.

"Our outlook for the fourth quarter reflects a strong anticipated ramp in wireless, as well as the continuing surge in demand for networking from cloud and telecom customers, more than offsetting expected softness in enterprise," Broadcom CEO Hock Tan said in a statement.

"All told, it was another very solid quarter for Broadcom, highlighted by strength in networking and broadband helping the business bide time before we see wireless revenue significantly grow due to the 5G iPhone ramp," said Jim Cramer and the Action Alerts PLUS team, which holds Broadcom in its portfolio. "Meanwhile, the company continues to integrate the predictable, high margin enterprise software business into the fold. Also, the business continues to show robust free cash flow generation and adjusted gross margin expansion, all despite the economic uncertainty related to the Covid-19 pandemic."

4. -- DocuSign Posts Earnings Beat but Stock Slides

DocuSign  (DOCU) - Get Report, the electronic signature company that has benefited from work-from-home trends, was tumbling in premarket trading Friday even after topping earnings and revenue expectations for its second quarter.

DocuSign posted adjusted earnings in the quarter of 17 cents a share, beating estimates of 7 cents, as revenue rose 45% from a year earlier to $342.2 million.

"In an accelerating digital world where business can be conducted from anywhere, the need to agree electronically and remotely has never been stronger, as shown in our 61% year-over-year billings growth," said DocuSign CEO Dan Springer. "We are just scratching the surface of our Agreement Cloud opportunity and believe we are increasingly becoming an essential cloud-software platform for organizations of all sizes."

DocuSign reported billings of $405.7 million in the second quarter, up from up from $252.4 million. Adjusted gross margin was 78%. 

For the current third quarter, DocuSign guided for total sales of $358 to $362 million, ahead of consensus of $335 million. For the full year, it guided for total sales between $1.38 and $1.39 billion, also ahead of Wall Street expectations of $1.32 billion.

The stock fell 7.21% to $224.55 in premarket trading.

5. -- Justice Department Plans Antitrust Suit vs. Google Maybe This Month 

The U.S. Justice Department plans to bring antitrust charges against tech giant  (GOOGL) - Get Report as soon as this month.

People briefed on internal agency conversations told The New York Times that Attorney General William Barr wants to bring the case quickly.

He overruled career lawyers at the Justice Department who wanted more time to build a case against Alphabet, which runs Google and YouTube, the Times reported.

The legal team working on the complaint against Google disagreed about how broad the probe should be and on the steps Google might take to resolve the government's issues with the search giant.

A senior department official told the Times that Barr felt that the agency was moving too slowly with its investigation and that setting a deadline was not unreasonable. The justice agency opened its inquiry into Alphabet in June 2019.

Alphabet was falling 1% in premarket trading to $1,613.22. The stock fell 5.12% on Thursday.