By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Fed's Evans, home builders' index, oil gains in focus
Stock futures trimmed earlier losses on Monday, as oil prices
climbed and investors digested dovish comments from a Federal
Reserve member who once again pushed for a rate-hike delay to
2016.
Some analysts remained upbeat that the S&P 500 can continue
to build on recent highs despite a relatively tepid start since the
beginning of the year. The S&P 500 is up about 3% so far this
year.
Futures for the Dow Jones Industrial Average (YMM5) were off 5
points to 18,224, while those for the S&P 500 index (ESM5)
dipped about 3 points to 2,115.90. Futures for the Nasdaq-100 index
(NQM5) slipped 1` points to 4,477.
The S&P 500 index (SPX) hit a record high of 2,122.73 on
Friday, after a string of weaker-than-expected economic data raised
doubt about the timing of the Fed's ability to raise interest
rates, possibly pushing that first move further out. The index
gained 0.3% last week
(http://www.marketwatch.com/story/dow-looks-set-for-push-into-record-territory-2015-05-15).
Fed Chicago President Charles Evans repeated his stance on
Monday that the central bank should hold back from raising
short-term interest rates this year. "It likely will not be
appropriate to begin raising the fed funds rate until sometime in
early 2016," he said in a speech prepared for delivery in Stockholm
(http://www.marketwatch.com/story/feds-evans-us-zero-rate-policy-stance-is-not-too-easy-2015-05-18).
Evans said weak first-quarter data is giving him "pause," and
he'd like to see "confirmation that they are indeed a transitory
aberration." See the full text of his speech here
(https://www.chicagofed.org/publications/speeches/2015/05-15-exercising-caution-in-normalizing-monetary-policy).
Investors will get a closer look at the central bank's thoughts
about interest rates and economic data when the minutes of the
Federal Open Market Committee meeting from April 29 are released on
Wednesday.
For Monday, the NAHB/Wells Fargo Housing Market index for April
will be released at 10 a.m. Eastern. It's one of several indicators
for the housing sector due this week.
Need to know: Stocks take aim at another record high even as a
'Great Reset' looms
(http://www.marketwatch.com/story/stocks-take-aim-at-another-record-high-even-as-a-great-reset-looms-2015-05-18)
S&P 500 is headed higher still? The S&P 500's move to a
new all-time high last week came just as the index looked to be
losing momentum, noted Bill McNamara, technical analyst at Charles
Stanley. "It is still too early to talk in terms of a 'breakout',
but the rebound following the minor break of the short-term uptrend
looks quite positive for the moment, and could even push U.S.
stocks a bit higher in the near term," he said.
Of course, given the resurgence of volatility in forex and bond
markets, it is a tougher market to call and it can't be dismissed
that the index could revisit the recent low at 2,080 again,
McNamara said in a note dated May 18.
Katie Stockton, chief technical strategist for BTIG, is now
targeting a short-term move to around 2,180 for the S&P 500 on
the heels of Friday's moves. "We expect upside follow-through as
investors shy away from selling in May. Pullbacks are always
possible, but the path of least resistance is higher," she said in
a note dated May 17.
Stocks to watch: Retailers will be in focus this week, with
earnings from Urban Outfitters Inc.(URBN) on Monday, Wal-Mart
Stores Inc.(WMT) and Home Depot Inc.(HD) on Tuesday, and Target on
Wednesday, to name a few.
Read: Big retailers cap earnings season against backdrop of weak
sales
(http://www.marketwatch.com/story/big-retailers-cap-earnings-season-against-backdrop-of-weak-sales-2015-05-15)
(http://www.marketwatch.com/story/big-retailers-cap-earnings-season-against-backdrop-of-weak-sales-2015-05-15)Also
read: Target puts some food suppliers on the back burner
(http://www.marketwatch.com/story/target-puts-some-food-suppliers-on-the-back-burner-2015-05-18)
(http://www.marketwatch.com/story/target-puts-some-food-suppliers-on-the-back-burner-2015-05-18)Shares
of (ANN) Ann Inc. jumped after the company received a buyout offer
(http://www.marketwatch.com/story/anns-stock-soars-after-buyout-deal-with-ascena-retail-group-2015-05-18)
from AscenaRetail Group Inc. (ASNA) in a deal valuing the women's
retail apparel store at $2 billion.
Shares of Endo International PLC (ENDP) rose 3% in premarket
trading after the company said it would buy privately held Par
Pharmaceutical in an $8 billion deal.
(http://www.marketwatch.com/story/target-puts-some-food-suppliers-on-the-back-burner-2015-05-18)Other
markets: European stocks reversed earlier gains and pushed lower.
The Nikkei 225 index rose, but Chinese stocks closed lower .
Oil was pushing higher on Monday
(http://www.marketwatch.com/story/oil-prices-rangebound-as-opec-meeting-draws-nearer-2015-05-18),
climbing back above $60 a barrel for West Texas Intermediate crude
(CLM5), after fighting in Iraq and Yemen triggered worries that
supply could be disrupted.
Read: Oil is at a make-or-break crossroads
(http://www.marketwatch.com/story/oil-is-at-a-make-or-break-level-2015-05-18)
(http://www.marketwatch.com/story/oil-is-at-a-make-or-break-level-2015-05-18)Gold
prices (GCM5) moved moderately higher, while the dollar
(http://www.marketwatch.com/story/dollar-up-against-yen-but-lacks-momentum-2015-05-18-21033538)(DXY)
rose against the yen, but fell slightly against the euro.
Read: Peter Schiff, more bullish than ever, sees gold headed to
$5,000
(http://www.marketwatch.com/story/peter-schiff-more-bullish-than-ever-sees-gold-headed-to-5000-an-oz-2015-05-15)
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