U.S. stock futures drifted lower Monday after a steep drop in
Chinese stocks weighed on markets around the world.
S&P 500 futures lost 10 points, or 0.5%, to 2067. E-mini Dow
futures eased 104 points, or 0.6%, to 17417. E-mini Nasdaq-100
futures fell 32 points, or 0.7%, to 4530. Changes in stock futures
don't always accurately predict moves after the opening bell.
The resurgence of sharp swings in Chinese stocks follows a few
weeks of calm, sparking concerns that authorities are pulling back
on measures to stabilize the market. The Shanghai Composite Index
ended down 8.5%, its worst daily percentage loss since February
2007. Monday's drop came on the heels of weak economic news on
Friday that exacerbated a selloff in several commodities.
"The government had put a number of measures in place to help
support the market and the market has kind of overwhelmed those
measures," said John Brady, managing director at futures brokerage
R.J. O'Brien. "You're seeing a little bit of a panic trade in
Chinese equity markets, and that's spilling over into global
equities."
European stocks also fell. France's CAC-40 slipped 1.9% and
Germany's DAX lost 1.9%.
Treasury prices rose as investors sought haven assets, pushing
the yield on the 10-year note down to 2.236% from 2.271% on
Friday.
Crude-oil futures slipped 1.1% to $47.62 a barrel. Gold futures
rose 0.6% to $1092.00 an ounce.
On Monday morning, investors will receive readings on U.S.
regional manufacturing activity and orders for big-ticket
manufactured goods. The number of companies reporting earnings
picks up later this week with results due from Ford Motor Co.,
Facebook Inc., and Procter & Gamble Co.
In corporate news, Teva Pharmaceutical Industries Ltd. said it
would buy Allergan PLC's generics unit for $40.5 billion in cash
and stock. Separately, Teva said it would drop its bid for Mylan
NV. Teva shares rose 13% premarket, and those of Allergan added
8.5%.
U.S. stocks fell last week, propelling the Dow to its steepest
point decline since December. The moves were driven by
disappointing corporate reports from Apple Inc. and Biogen Inc.,
which prompted a broader selloff in highflying biotechnology
stocks.
The euro rose against the dollar Monday. Still, the euro has
tumbled 9.2% against the dollar this year, through Friday. ""Some
big names ... have stated specifically that the strength of the
dollar is crimping corporate profits," said Mr. Brady. "With
stretched valuations and an adjustment taking place given the
stronger dollar, it's really hard to see equities moving
significantly higher from here."
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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