By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.S. stock futures turned higher
Tuesday, a day after a brutal selloff, but a continuing slide on
oil prices could keep gains in check during Wall Street's trading
day.
Futures for the Dow Jones Industrial Average (SPH5) swung higher
by 27 points, or 0.2%, to 17,477, erasing earlier losses, and those
for the S&P 500 index (SPH5) picked up 3.5 points, or 0.2%, to
2,019.40. Futures for the Nasdaq 100 (NDH5) rose 5 points, or 0.1%,
to 4,166.75.
On Monday, U.S. stock markets took a battering as crude-oil
prices slid again and as the dollar (DXY) surged. The S&P 500
marked its biggest one-day loss in three months, falling 37.62
points, or 1.8%. The Dow (DJI) also had its worst down day since
October, dropping 331.34 points as 28 of its 30 components closed
lower. The Nasdaq Composite (RIXF) fell 1.6%.
"One would question whether this is 'Turnaround' Tuesday or
simply a pause before the next leg down," said Brenda Kelly, chief
market strategist at IG, in emailed comments. "The plunge in
equities yesterday was unexpectedly extreme so we may be witnessing
some profit taking and an element of bargain hunting."
Overall, "we are still in a low-interest-rate environment, and
as has been the case for the past few months, risky assets provide
a yield that cannot be gleaned elsewhere," she wrote.
Crude extended losses on Tuesday, with U.S. oil futures (CLG5)
down nearly 2%, trading just above $49 a barrel. Brent futures were
down 2%, but off intraday lows.
"The economic conditions that oil faces continue to be
aggressively against the commodity, making buyers extremely
hesitant to even consider entering long positions," said Jameel
Ahmad, chief market analyst at FXTM, in a Tuesday note. "There are
also suspicions that as oil companies struggle to adapt to lower
profits, there could be mergers and acquisitions taking place in
the future and this will weigh on investor sentiment. What's the
answer to this equation? Bearish moves for oil."
Investors will get a look at activity in the services sector
when the Institute for Supply Management releases December data at
10 a.m. Eastern. ISM's manufacturing index, released Friday, showed
a slowing in U.S. activity. A report on factory orders in November
is also due at 10 a.m. Eastern.
There are no Federal Reserve speakers scheduled for Tuesday,
ahead of the release Wednesday of minutes from the Federal Open
Market Committee's meeting in mid-December. But the key data event
this week is the U.S. monthly jobs report for December, due
Friday.
Stocks to Watch: Verizon Communications Inc. (VZ) has approached
AOL Inc.(AOL) about a possible acquisition or joint venture,
Bloomberg reported Monday, citing people with knowledge of the
matter.
Cyberonics Inc.(CYBX) shares fell Monday evening after the
medical device maker said an appeals board supported a 2007
decision by the Centers for Medicare and Medicaid denying coverage
of the company's pacemaker-like device for treating depression.
Coach Inc. (COH) shares were up 1.5% in premarket trade Tuesday
after the company said it's buying luxury footwear brand Stuart
Weitzman from private equity firm Sycamore Partners, in a deal
valued at up to $574 million.
Other markets: Meanwhile, the yield on the 10-year Treasury fell
below 2%, to 1.99%, according to Tradeweb. Yields have been hitting
lows not seen in almost two years, discounting the mini flash-crash
in mid-October, indicating investors are looking to bonds as a safe
haven.
In Asia, the Nikkei fell 3% to post its biggest one-day loss in
nearly 10 months, and Indian shares plummeted 3.1%, the steepest
loss since September 2013. European stocks turned higher, pushing
back from a loss that followed a clutch of lackluster economic
data.
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