By Saumya Vaishampayan
Stock futures were little changed Wednesday, indicating a pause
for the Dow industrials a day after hitting a record.
Dow Jones Industrial Average futures fell one point to 17861.
S&P 500 futures lost one point to 2065. Nasdaq-100 futures rose
one point to 4307. Changes in stock futures don't always accurately
predict moves in the stock market after the opening bell.
Stock futures continued to hover near the flatline after data
showed private payrolls increased by 208,000 in November, according
to payroll processor Automatic Data Processing Inc. and forecasting
firm Moody's Analytics. Economists surveyed by The Wall Street
Journal had expected payrolls to increase by 223,000. A report on
activity in the service sector is scheduled for release later in
the morning.
Energy stocks were the best performers Tuesday on the Dow
industrials and the S&P 500, helping the Dow reach its 32nd
closing high of 2014. The Dow rose 0.6% to 17879.55, and the
S&P 500 advanced 0.6% to 2066.55.
Stocks have gained in recent years on the back of easy-monetary
policy from the Federal Reserve. The Dow has gained about 173% from
its March 2009 low through Tuesday's close, while the S&P 500
has advanced nearly 206% in the same period. While the Fed has
ended its bond-buying program and is likely to raise short-term
interest rates sometime next year, other major central banks are
stepping up their stimulus programs in order to fight slowing
growth and low inflation in their own economies. This additional
stimulus is likely to keep global interest rates low, making stocks
more attractive than other assets.
"While we continue to see a lot of uneven growth globally, the
fact that central banks continue to be stimulative in this
environment supports the market," said Jim Dunigan, chief
investment officer at PNC Wealth Management.
There is likely to be increased volatility when the Fed does
finally raise interest rates, but the backdrop should be positive
for stocks, Mr. Dunigan said. That is because the decision to raise
rates will happen after "the Fed thinks the economy is strong
enough to stand on its own," he said.
In the eurozone, data released Wednesday revealed that
private-sector activity slowed more sharply in November than
previously estimated. The data come ahead of the European Central
Bank's policy announcement on Thursday. The euro dropped to a
two-year low in the wake of the data and the Stoxx Europe 600 rose
0.4%.
In the eurozone, data released Wednesday revealed that
private-sector activity slowed more sharply in November than
previously estimated. The data come ahead of the European Central
Bank's policy announcement on Thursday. The euro dropped to a
two-year low in the wake of the data and the Stoxx Europe 600 rose
0.4%.
Oil prices rebounded. Crude-oil futures rose 0.7% to $67.36 a
barrel. Crude has slumped nearly 38% since June 20, which marked
its 2014 high, through Tuesday's settlement.
In other commodity markets, gold futures rose 0.5% to $1205.10
an ounce.
The yield on the 10-year Treasury note was little changed at
2.288% versus 2.285% on Tuesday. Yields rise as prices fall.
In corporate news, Bank of New York Mellon Corp. yielded to
activist pressure and gave Trian Fund Management LP a seat on its
board. Shares were unchanged in premarket trading.
Abercrombie & Fitch Co. cut its outlook for the year ending
in January, and is now expecting per-share earnings of $1.50 to
$1.65. The guidance missed analysts' already-lowered expectations.
The teen retailer had previously expected per-share earnings of
$2.15 and $2.35 for the year. Shares fell 4.9% premarket.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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