By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- U.S. stock futures pushed south on
Wednesday amid some concerns the rally could be running out of some
steam, though no big action was expected ahead of the minutes of
the latest Federal Open Market Committee meeting.
Futures for the Dow Jones Industrial Average (DJU4) fell 18
points to 16,863, while those for the S&P 500 index (SPU4)
eased 2.6 points to 1,974.60. Futures for the Nasdaq-100 index
(NDU4) fell 2.75 points to 4,031.50.
No other economic events are on the calendar for Wednesday
outside of the minutes of the July 29-30 FOMC meeting. Some of the
language in the July policy statement was more hawkish, with the
Fed dropping language describing the jobless rate as "elevated,"
instead noting "a range of labor market indicators suggests that
there remains significant under-utilization of labor
resources."
"The question which everyone will be asking is if the Fed are
ready to increase the interest rate sooner rather than later. Some
hawkish members have certainly started beating the drums of an
early increase," said Naeem Aslam, chief market analyst at Ava
Trade.
While investors may glean clues about the Federal Reserve's exit
strategy from the minutes, markets may also quickly move past them
to focus on Fed Chairwoman Janet Yellen's speech on Friday morning
(10 a.m. Eastern Time) in Jackson Hole, Wyoming. Yellen to stress
patience on rates at Jackson Hole
U.S. stocks were buoyed on Tuesday by better-than-expected
housing starts and a handful of upbeat earnings. The S&P 500
index (SPX) rose 0.5%, to close at 1,981.60, while the Dow
industrials (DJI) gained 0.5% to end at 16,919.59. The Nasdaq
Composite (RIXF) added 0.4% to finish at 4,527.51, scoring its
highest close since March 31, 2000 for the second session in a
row.
What strategists are saying: Wall Street has seen a boost in
recent sessions due to a lack of upheaval on the geopolitical
front, but this rally looks to be running out of steam, said Joao
Monteiro, analyst at Valutrades, in a note to investors.
"This is perhaps no real surprise -- markets are now nudging
back into that inflated territory and there is still the risk of
one or more of the conflict hot-spots escalating significantly,
although the risk-on trade remains in favor -- we have USD/JPY
(USDJPY) back above Yen103 and gold (GCZ4) resolutely below
$1,300/oz," he said.
If the Fed minutes show another bias, Monteiro said equities
"could well find an excuse to move higher once again."
Investors should keep buying the dips in this market, because
it's just showing signs of a maturing bull phase, rather than
"warning of an impending market turnaround," said strategists at
Citigroup in a recent note. Among the five measures they look at,
stock-return volatility across sectors remains stubbornly low and
doesn't suggest a narrowing of the market, say the Citi
analysts.
Movers & shakers: Apple Inc. (AAPL) nailed an all-time
split-adjusted closing high on Tuesday, and investors could give
those shares another look. 7 reasons why this product cycle will be
different for Apple
Digital Ally Inc. (DGLY) could add to a 6% late-session gain
after the company gained on a report that said police officers tend
to use less force when wearing cameras. The company makes wearable
cameras for law enforcement.
Shares of PetSmart Inc. (PETM) could gain after a 3%
late-session rise. The pet-supplies retailer said it was exploring
"strategic alternatives" including a possible sale of the company,
and reported second-quarter earnings that beat forecasts.
La-Z Boy Inc. (LZB) could see premarket pressure after a
late-trade drop, which came after earnings fell short of forecasts.
The furniture-maker also said its board had approved a buyback of
up to 5 million additional shares.
Hertz Global Holdings Inc. (HTZ) shares could come under
pressure premarket after the rental-car company said it expects to
be "well below the low end" of guidance, due to operational
challenges and costs from restating its financial statements for
the last three years.
Real Goods Solar Inc. (RGSE) fell 18% in late trade and could
see premarket pressure after the company posted a loss and said its
chief executive Kam Mofid had resigned, with Dennis Lacey taking
his place.
Other markets: The British pound (GBPUSD) rose against the
dollar, after the minutes of the Bank of England's latest policy
meeting showed a split vote for the first time in three years. Two
members voted for a rate hike. The FTSE 100 index eased, while the
Stoxx Europe 600 index was flat. Russia and Ukraine worries came
back to haunt Carlsberg AS , which slid over 4% after it warned
that problems due to that conflict will have a bigger-than-expected
hit on full-year earnings than initially thought.
In Asia, markets made moderate gains, outside a small loss for
the Shanghai Composite Index . The dollar hit multi-month highs
against the yen, British pound and euro on the heels of U.S.
home-construction data from Tuesday.
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