By Shreyashi Sanyal and Arjun Panchadar

(Reuters) – U.S. stock index futures dipped on Wednesday as a new U.S. bill taking a hard line on China stoked fresh concerns about a prolonged trade war, but more positive results from the banking sector provided some relief and signaled a solid start to the third-quarter earnings season.

Bank of America (N:), the second-largest U.S. bank by assets, rose 2.2% in premarket trading after beating third-quarter profit estimates.

This followed upbeat results on Tuesday from major U.S. banks JPMorgan Chase & Co (N:), Citigroup Inc (N:) and healthcare giants Johnson & Johnson (N:) and UnitedHealth Group Inc (N:).

Tech heavyweights Netflix Inc (O:) and International Business Machines (N:) are due to report later on Wednesday.

Analysts have forecast a 3% drop in third-quarter earnings for S&P 500 companies, projecting their worst quarterly performance in nearly three years, according to Refinitiv data.

The U.S. House of Representatives passed legislation on Tuesday related to pro-democracy protests in Hong Kong and the extradition of a Chinese telecom executive. In response, China warned that bilateral relations would be damaged if the measures became law.

The two countries have been embroiled in a tit-for-tat tariff war that has taken a toll on financial markets in the past 15 months and dented growth in the global economy. Last week, U.S. President Donald Trump announced a partial trade deal, but it did not include concrete details.

At 7:22 a.m. ET, were down 51 points, or 0.19%. S&P 500 e-minis were down 5.75 points, or 0.19% and were down 16.25 points, or 0.2%.

A Commerce Department report at 8:30 a.m. ET is likely to show U.S. retail sales rising 0.3% in September, after a 0.4% gain in August.

Among other stocks, Achillion Pharmaceuticals Inc (O:) surged 86.8% after drugmaker Alexion Pharmaceuticals Inc (O:) agreed to buy the biotech firm in a deal initially valued at $930 million.

PNC Financial Services Group Inc (N:) gained 0.3% after the regional bank beat Wall Street estimates for quarterly profit.

Eli Lilly and Co (N:) fell 1.5% after the drugmaker said its experimental pancreatic cancer treatment in combination with a cocktail of chemotherapies did not meet the main goal in a late-stage study.

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2019-10-16