(Reuters) - U.S. stocks on Thursday were set to surrender a third of their gains from a spectacular rally a day earlier that helped the blue-chip Dow Jones Industrial Average surge more than 1,000 points for the first time ever.
At 8:36 a.m. ET, Dow e-minis were down 1.35 percent. S&P 500 e-minis fell 1.33 percent and Nasdaq 100 e-minis 1.36 percent.
All 30 Dow components were in the red in premarket trading while members of the FAANG group of stocks lost between 1.1 percent and 1.8 percent.
U.S. banks were also seen losing ground, with Goldman Sachs Group Inc, Bank of America Corp, JPMorgan Chase & Co and Morgan Stanley down between 1.2 percent and 1.7 percent.
Wednesday’s rebound, which also helped all three indexes notch their largest daily percentage gains in nearly a decade, was fueled by a strong U.S. holiday sales report, a jump in oil prices and investors reversing bets against a wide range of stocks after four days of declines.
The rally was because the market was very oversold and small investors mostly boosted the market higher, said Naeem Aslam, chief market analyst at Think Markets UK Ltd in London.
“Traders will be booking profits from the gains they made yesterday and that will be the major focus for investors,” Aslam added.
Despite Wednesday’s rally, the Dow and S&P are still down more than 10 percent for the month, on pace for their biggest monthly percentage drop since February 2009.
Weighing on sentiment was President Donald Trump’s comment that he was prepared to wait as long as it takes to get funding for his U.S.-Mexico border wall, a demand that has triggered a partial shutdown of the federal government that is now in its fifth day.
Congress was scheduled to reconvene after a holiday break on Thursday and resume debate on the matter.
Separately, Reuters reported Trump is considering an executive order in the new year that would bar U.S. companies from using telecommunications equipment made by China’s Huawei Technologies Co Ltd and ZTE.
This comes as China and the United States plan face-to-face consultations to resolve their trade dispute, which has rocked stock markets, along with concerns over slowing economic growth and rising interest rates.
After strong holiday sales report from Mastercard on Wednesday, investors will watch for the consumer confidence data due at 10:00 a.m. ET, which is likely to show the index fell to 133.7 in December from 135.7 in the month before.
Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva