Facebook plunge to hit Nasdaq, offset US-EU trade deal

By Amy Caren Daniel

(Reuters) - A massive selloff in shares of Facebook set the tech-heavy Nasdaq on track to shed about 100 points at the open on Thursday, while S&P and Dow futures got a boost from signs the United States and the European Union will negotiate on trade.

Facebook shares plunged 20.6 percent in premarket trading after the company said profit margins would plummet for several years due to the costs of improving privacy safeguards and slowing usage in its biggest advertising markets.

The warnings dragged on the other components in the high-growth FAANG group. Netflix declined 1.4 percent, Alphabet dropped 1.0 percent. Amazon.com, due to report results after the bell, fell 1.2 percent, while Apple slipped 0.3 percent.

Twitter, set to report on Friday, dropped 3.2 percent.

The declines threatened to overshadow the lift to sentiment after the United States and EU agreed to work toward eliminating tariffs on industrial goods and increasing U.S. exports of liquefied natural gas, soybeans.

"It's going to be hard for markets today with such a massive market cap stock down so much," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

"It is possible that easing tensions could outweigh something like Facebook, because that has been the biggest concern of markets for weeks and Facebook is a one-off negative event."

At 8:39 a.m. ET, Nasdaq 100 e-minis were down 51.75 points, or 0.69 percent and S&P 500 e-minis were down 4 points, or 0.14 percent. Dow e-minis were up 58 points, or 0.23 percent.

Supervalu surged 64.1 percent after United Natural Foods agreed to buy the supermarket operator in a deal valued at about $2.9 billion. United Natural slipped 8.9 percent.

Of the 148 S&P 500 companies that have reported earnings so far, 85.8 percent have topped estimates. If the beat rate holds, it will be the highest on record, dating back to the first quarter of 1994, according to Thomson Reuters I/B/E/S.

Ford fell 3.8 percent after the automaker lowered its full-year profit forecast due to slumping sales and trade tariffs in China and its struggling business in Europe.

McDonald's dipped 0.4 percent after U.S. same-restaurant sales missed estimates even as the fast-food chain posted better-than-expected quarterly results.

Mattel dropped 7.6 percent, while D.R. Horton gained 3.7 percent after results.

Mastercard declined 2.8 percent and Visa fell 1.5 percent despite the payments processors topping profit estimates.

Chipmakers were a bright spot.

Advanced Micro Devices jumped 7.2 percent, while Xilinx rose 6.3 percent after the companies topped quarterly estimates.

Qualcomm gained 6.5 percent, while NXP Semiconductors fell 6.2 percent. Qualcomm ended its $44-billion pursuit of NXP after failing to win Chinese regulatory approval.

(Reporting by Amy Caren Daniel in Bengaluru; Editing by Sriraj Kalluvila)