By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- U.S. stock futures struggling Monday as
relief after European Union bank stress tests was replaced by worry
over weak German data.
Analysts said investors could see some jitters in the run-up to
this week's Federal Open Market Committee meeting.
Futures for the S&P 500 index (SPZ4) fell 1.3 points to
1,958.40, while those for the Dow Jones Industrial Average (DJZ4)
added 2 points to 16,738. Futures for the Nasdaq-100 index (NDZ4)
rose 2 points to 4,035.50.
The S&P 500 (SPX) posted its biggest weekly gain of 2014
last week, rising 4.1%, with stocks lifted by upbeat corporate
results and strong housing data. This week, markets will focus on
the Federal Open Market Committee meeting, where the central bank
is expected to announce the end of quantitative easing. How QE
worked in the U.S. -- and could work in Europe.
Traders will be looking to see if the Fed drops the
"considerable period" for keeping rates low at its two-day policy
meeting, which concludes Wednesday. As several Fed officials have
come out with dovish comments recently, investors largely expect
that guidance to be reiterated.
Goldman sees another 10% gain for stocks: The S&P 500 should
climb to 2,050 by year-end and rise by 10% to 2,150 in 10 months,
said Goldman Sachs's chief equity strategist David Kostin in a note
to clients Friday. He said that move will come as "investors
recognize the durability of U.S. growth, despite faltering global
activity."
The September reading on pending home sales will be released at
10 a.m. Eastern Time. The week will also deliver data on durable
goods, gross domestic product and consumer spending. Growth data
will be the highlight, with the government expected to report
economic expansion of 3% in the third quarter.
Stocks to watch: Merck & Co. Inc.(MRK) and Allergan Inc.
(AGN) will report ahead of the market's open. Merck is among the
health-care and energy sectors that are expected to dominate
investor attention this week as they deliver results. After the
close on Monday, Twitter Inc. (TWTR) will report earnings. What to
look for in Twitter's results
Other markets: European stocks drifted to flat after the German
Ifo index of business sentiment fell to 103.2, falling short of
forecasts. The survey's outlook for the German economy also
deteriorated again. Banks were getting a lift from the results of
regulators' stress tests, which found most lenders in good health.
In Asia, markets had a mixed day with Chinese stocks off, but
Japan's Nikkei index climbing. Oil (CLZ4) ticked higher, while gold
(GCZ4) prices did the opposite.
Stocks and ETFs linked to Brazil came under sharp pressure in
premarket action, after President Dilma Rousseff won a second term
on Sunday, defeating the conservative Aecio Neves in a narrow
victory. Economists worry that four more years of Rousseff will
increase Brazil's economic downturn.
The Direxion Daily Brazil Bull 3X Shares ETF (BRZU) tumbled 27%,
while U.S.-listed shares of Petroleo Brasileiro SA (PBR) slid 14%
in premarket action.
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