By Barbara Kollmeyer, MarketWatch Euro tumbles after ECB
president Mario Draghi speaks
MADRID (MarketWatch) -- A dovish European Central Bank President
Mario Draghi and a rate cut from China's central bank triggered a
rally for stock futures on Friday, with the ground laid for another
record-setting session for Wall Street.
Already higher after comments from Draghi, futures doubled gains
after China's Central Bank cut interest rates. Futures for the Dow
Jones Industrial Average (DJZ4) surged 123 points, or 0.7%, to
17,818, while those for the S&P 500 index (SPZ4) jumped 33
points, or 0.6%, to 2,065. Futures for the Nasdaq-100 index (NDZ4)
rose 27.50 points, or 0.7%, to 4,276.
China's central bank cut its one-year loan rate by 0.4
percentage points and its one-year deposit rate by 0.25 percentage
points, and said it would allow more flexibility in deposit
rates.
Ahead of that, Draghi signaled the central bank was ready to
step up asset buying. "We will continue to meet our responsibility
-- we will do what we must to raise inflation and inflation
expectations as fast as possible, as our price-stability mandate
requires of us."said this at a banking conference in Frankfurt:
"
Gains spilled over into Europe, where the Stoxx 600 index surged
1.4%, while the euro (EURUSD) slid against the dollar.
A floor to build on for stocks: With no U.S. data to focus on,
accommodative global central banks could give investors reason to
run for more records on Friday.
On Thursday, the S&P 500 (SPX) logged its 44th record close
this year, though just a marginal 0.2% gain to 2,052.75. The Dow
industrials (DJI) logged a 27th record close. Trading volumes were
thin, something Goldman Sachs said investors should get used to in
the coming year. See also: Crash-caller Schiff says Fed will cause
the next one
Dan Greenhaus, chief strategist at BTIG, noted that the S&P
500 seems to have found a bottom around 2,040/2,041, which has
functioned as support for the past three days.
"It might not mean much technically, but several with whom we're
speaking feel like that is the level to watch as a new floor. If
you think equities push higher into year-end, this is the level
from which such a move might begin," said Greenhaus in a note.
Stocks to watch: Just two companies will report on Friday:
Retailers Ann Inc. (ANN) and Foot Locker Inc. (FL).
Gap Inc. (GPS) could see premarket pressure, after results late
Thursday missed Wall Street forecasts and the retailer delivered a
disappointing full-year outlook.
Splunk Inc. (SPLK) rose 5% in late trading after results topped
analysts forecasts.
Wynn Resorts Ltd. (WYNN) may take a hit in premarket trading,
after The Wall Street Journal reported, citing sources, that the
casino operator is being investigated by federal authorities over
whether it broke money-laundering rules.
Yen gets a lift: While the euro tumbled, the yen(USDJPY) rose
against the dollar to around Yen117.83 after Japan Finance Minister
Taro Aso said "the pace of the decline in the past week has been
too fast" and sharp swings in the exchange rate are undesirable.
The Nikkei 225 snapped a four-day losing streak, rising along with
the yen.
Gold (GCZ4) ticked higher, but oil prices (CLF5) shot up after
the Chinese rate cuts.
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