US Stock futures tumble as Wall Street waits for Yellen
New York (Sept 24) Losses for stock futures accelerated Thursday ahead a highly anticipated speech from Federal Reserve Chairwoman Janet Yellen.
Fresh economic data, including reports on orders for durable goods and weekly jobless claims, also should grab investors’ attention.
“Market liquidity constraints, mixed messages from the Fed, the fallout in the [emerging-markets] space coupled with the lack of clarity on China and now the increasing risk of US government shutdown all playing havoc with investor sentiment,” Brenda Kelly, head analyst at London Capital Group, said in a note to clients.
Futures for the Dow Jones Industrial Average YMZ5, -0.85% tumbled 122 points, or 0.8%, to 16,067, while those for the S&P 500 index ESZ5, -0.83% fell 14.35 points, or 0.7%, to 1,914.75. Futures for the Nasdaq-100 index NQZ5, -1.06% dropped 36.50 points to 4,225.25.
U.S. stocks finished in the red for a second straight session Wednesday, as a rally in crude oil fizzled out and the commodity closed at the lowest level in over a week. Oil prices were again attempting to rebound Thursday, with November U.S. crude CLX5, +0.40% last up 43 cents to $44.66 a barrel.
Norway’s central bank cut its key interest rate to 0.75% from 1% on Thursday. Officials said lower oil prices are taking a toll on the economy, and said rates may need to move lower still.
Priscilla Hancock, the global fixed income strategist at JPMorgan, makes the case for municipal and high-yield bonds but warns that investment-grade corporate bonds could face headwinds.
Data and Fed speakers will hog the limelight on Thursday. Weekly jobless claims will hit at 8:30 a.m. Eastern Time. So will a report on August durable-goods orders, which is expected to show a drop of 2% against a 2% rise in July.
At 10 a.m. Eastern, new home sales for August are expected.
In a heavily anticipated speech, the Fed’s Yellen will speak on inflation dynamics and monetary policy at the University of Massachusetts Amherst at 5 p.m. Eastern. Investors are looking for comments about last week’s policy meeting and the decision to leave interest rates on hold. But analysts say don’t expect her to offer clues on the timing of a rate hike.
That speech is taking a toll on stocks before it even hit the tape, said David Madden, IG market analyst, in a note to investors. “Now that the September question has been put to bed the focus is now on December, and the latest Fed update wasn’t dovish enough to rule out at rate increase at the end of the year,” he wrote.
Stocks to watch: KB Home KBH, +1.47% will release results ahead of the market open, while Nike Inc. NKE, -0.47% Bed Bath and Beyond Inc. BBBY, -0.38% and Jabil Circuit Inc. JBL, -1.09% are due to release results after the closing bell.
Other markets: European stocks swung between losses and gains, with the Stoxx Europe 600 index SXXP, -1.57% was recently down 0.5%. The German DAX 30 index DAX, -1.96% was down 0.7%. BMW AG BMW, -6.71% plunged amid a report that one of its cars sharply exceeds emission norms in a road test.
Martin Winterkorn resigned Wednesday as chief executive of Volkswagen AG VOW3, -0.44% VLKAY, +6.53% VOW3, -0.44% VOW3, +2.33% which is engulfed in an emissions-fraud scandal. Although the stock is rebounding from again from its two-day, 29% plunge at the start of the week, it may be too early to bottom-fish.
Japan’s Nikkei 225 index NIK, -2.76% returned from a three-day break to losses, closing down 2.8%.
The dollar USDNOK, +1.5103% shot up 2% against the Norwegian krone on the heels of the Norwegian rate cut. The dollar USDJPY, -0.53% pulled back against the Japanese yen, dropping to ¥119.95 from ¥120.29 late Wednesday in New York.
Source: MarketWatch
