By Sara Sjolin, MarketWatch
Time Warner Cable rallies premarket on takeover news
U.S. stocks-index futures continued to weaken shortly before the
opening bell on Tuesday after a report on orders for durable goods
that matched expectations.
The headline number for durable-good orders fell 0.5% in April,
but orders for core capital goods -- a proxy for business
investment -- climbed 1% to mark the second straight gain.
Also read: Signs of revival in business investment seen in April
durable-goods report
(http://www.marketwatch.com/story/signs-of-revival-in-business-investment-seen-in-april-durable-goods-report-2015-05-26)
Positive readings on recent economic data have been greeted as
negative news for markets, as investors fret that the Federal
Reserve will have more ammunition to raise interest rates sooner
rather than later.
Futures for the Dow Jones Industrial Average (YMM5) pulled back
43 points, or 0.2%, to 18,181, while those for the S&P 500
index (ESM5) lost 7.3 points, or 0.3%, to 2,117.30. Futures for the
Nasdaq 100 index (NQM5) gave up 16.5 points, or 0.4%, to
4,512.25.
U.S. markets were closed for Memorial Day on Monday.
The benchmarks were keying off weakness from last week, when
Federal Reserve Chairwoman Janet Yellen warned that a rate hike is
still in the cards for 2015. Stronger-than-expected inflation data
on Friday further added to speculation that the first monetary
tightening will come before the end of the year, as growth in
consumer prices is moving closer to the Fed's target.
The dollar rallied on the back of the inflation data on Friday
and continued its ascent on Tuesday
(http://www.marketwatch.com/storyno-meta-for-guid). The ICE dollar
index (DXY) jumped 1% to 97, while the greenback climbed to an
almost eight-year high against the yen at Yen122.74, up from
Yen121.56 on Monday.
Data: Economic figures out on Tuesday will also be scrutinized
by investors for any strength or weakness that could play into the
timing of a Fed move.
Orders for durable U.S. goods fell a seasonally adjusted 0.5% in
April, matching the forecast by economists polled by MarketWatch.
Yet orders minus transportation rose 0.5%, the Commerce Department
said Tuesday.
"Given that rate hikes will always be 'data dependent', bullish
traders won't want to see a meet or beat on April's durable-goods
orders," said Brenda Kelly, head analyst at London Capital Group in
a note.
"We are back to the heady days where bad news is positive for
equities. Assuming we ever left those days," she added.
At 9 a.m. Eastern Time, the Case-Shiller home-price index and
FHFA home-price index for March are due, followed by May consumer
confidence and new home sales for April at 10 a.m. Eastern.
Fed speakers: Fed Vice Chairman Stanley Fischer speaks on "the
Fed and the global economy" in Tel Aviv, Israel at 7:30 p.m. local
time or 12:30 p.m. Eastern Time.
In a speech on Monday, Fischer said he saw short-term rate at
3.25%-4% in three to four years
(http://www.marketwatch.com/story/feds-fischer-sees-short-term-rate-at-325-4-in-three-to-four-years-2015-05-26)
Richmond Fed President Jeffrey Lacker, who is not a voting
member of the Federal Open Market Committee this year, gives a
speech on financial stability at Louisiana State University in
Baton Rouge, La. at 8:10 p.m. Eastern.
Earnings: Reporting ahead of the bell, AutoZone Inc.(AZO) said
third-quarter same-store sales rose 2.3%, while earnings per share
climbed 13% to $9.57.
Then after the bell, TiVo Inc.(TIVO) is expected to post
first-quarter earnings of 7 cents a share, unchanged from a year
earlier.
Movers and shakers: Shares of Time Warner Cable Inc.(TWC) surged
8.5% ahead of the bell, after Charter Communications Inc. (CCMMV)
said it will buy the cable-TV company
(http://www.marketwatch.com/story/charter-to-merge-with-time-warner-in-55-billion-deal-2015-05-26-61034117)
for $55 billion in a cash-and-stock deal. Charter shares were 3.7%
higher premarket.
Cerulean Pharma Inc. (CERU) jumped 8.7% ahead of the bell after
the biotech company said the U.S. Food and Drug Administration has
granted orphan drug designation to its CRLX101 drug, a treatment
for ovarian cancer
Other markets: European stock markets were mainly lower as
investors continued to track developments in Greece's bailout
negotiations
(http://www.marketwatch.com/story/greece-wont-meet-imf-repayments-in-june-interior-minister-says-2015-05-24).
The euro traded as low as $1.0884 on Tuesday, its lowest level
since April 28, down from $1.0978 on Monday
Asian markets closed mixed
(http://www.marketwatch.com/storyno-meta-for-guid), while oil
(http://www.marketwatch.com/storyno-meta-for-guid)(CLN5) and metals
prices were hit by the dollar rally.
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