By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- U.S. stock futures were under pressure
on Monday as investors braced for important jobs data and a
European Central Bank meeting later in the week, while unrest in
Hong Kong and increasing strength in the dollar helped to undermine
market confidence.
Dow Jones Industrial Average (DJZ4) futures fell 113 points, or
0.7%, to 16,917, extending their losses, while those for the
S&P 500 (SPZ4) fell 13.5 points, or 0.7%, to 1,962.40. Futures
for the Nasdaq 100 index (NDZ4) fell 29.25 points, or 0.7%, to
4,016.75.
At least some of the early unrest in the market stemmed from
violent pro-democracy clashes in Hong Kong over the weekend and on
Monday, which forced some banks and businesses to close and pushed
the Hang Seng Index 1.9% lower. Meanwhile, the dollar hit its
highest level in more than six years against the yen on the
perception that the U.S. central bank is looking stronger than its
peers around the globe.
Wouter Sturkenboom, London-based investment strategist at
Russell Investment, said the losses could revert through the course
of the day. U.S. stocks staged a rally on Friday, but finished the
week in the red after Thursday's rout. Read: Investors likely to
focus on jobs data
Two big events to watch this week: "For us, this week is about
two things: ECB [European Central Bank] policy and nonfarm
payrolls," said Sturkenboom, referring to Thursday's ECB meeting
and Friday's payrolls. He said traders are expecting a robust
payrolls growth number of around 215,000. "Anything that upsets
that expectation will cause volatility, but that volatility could
go either way." Read: Big rebound seen for U.S. jobs growth
As part of a full week for data, personal income and
consumer-spending data for August will be released at 8:30 a.m.
Eastern Time on Monday. Pending home sales for August are out at 10
a.m. Eastern.
Chicago Fed President Charles Evans will appear on CNBC at 8
a.m. Eastern, then give a speech on current economic conditions to
the National Association for Business Economics meeting in Chicago
at 9 a.m. Eastern. Evans will be a voting member of the Fed policy
committee in 2015.
Dollar soars, Hong Kong slumps: Sturkenboom said this will also
be a big week for the dollar (USDJPY), which reached a 22-month
high against the euro Monday (EURUSD). "Both the ECB and NFP report
will directly impact this trend and we wouldn't be surprised if we
get another strong U.S. dollar week," he said.
While Hong Kong stumbled, the rest of Asia finished mixed.
Europe stocks eased back with miners under pressure in London,
partly due to China-growth worries.
Stocks to watch: DreamWorks Animation SKG (DWA) surged 21% in
premarket after The Hollywood Reporter said Japanese conglomerate
SoftBank is looking to acquire the animation studio.
Athlon Energy Inc (ATHL) jumped 24% on news Encana Corp. (ECA)
will buy it for $5.93 billion in cash.
Shares of Ambit Biosciences Corp. (AMBI) climbed 90% on news
Daiichi Sankyo Co. will buy Ambit for about $315 million in
cash.
European Union regulators are expected to publish a report as
soon as Monday showing tax practices granted to Apple Inc. (AAPL)
and Fiat SpA violated EU law, according to a report in The Wall
Street Journal reported, citing sources.
Late Friday, Yahoo! Inc. (YHOO) Chief Executive Officer Marissa
Mayer said the company is reviewing a letter from activist investor
Starboard Value, urging it to merge with AOL Inc.(AOL). Shares were
up slightly.
Options contracts on shares of Alibaba Group Holding Ltd.(BABA)
are expected to become available on Monday.
Janus Capital Group Inc. (JNS) shares were off by 1%. On Friday,
Pimco founder Bill Gross said he would leave Pimco to take a job at
Janus. Morgan Stanley upgraded Janus shares to equal weight on the
view that more assets will follow Gross than the market
expects.
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