CHK Chesapeake Energy Corporation

By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch

Valeant plunges; energy companies get hit

Stock futures extended losses Tuesday, after a flurry of economic data offered a mixed picture of the U.S. economy a day ahead of the Federal Open Market Committee's decision on interest rates.

Continued pressure on oil prices pulled down the shares of energy companies, weighing on the main benchmarks.

Dow Jones Industrial Average futures fell 88 points, or 0.5%, to 17,040, while S&P 500 index futures lost 12 points, or 0.6%, to 1,998. Nasdaq-100 futures fell 17 points, or 0.4%, to 4,340.

Sales at U.S. retailers dipped in February (http://www.marketwatch.com/story/retail-sales-in-february-fall-for-second-straight-month-2016-03-15)and January turned out to be an even poorer month than initially estimated, new government figures showed on Tuesday. And U.S. wholesale prices fell 0.2% in February (http://www.marketwatch.com/story/us-producer-prices-fall-02-in-february-2016-03-15-81033630)to mark the fifth decline in seven months, largely because of lower gasoline and food prices.

But a reading of New York-area manufacturing conditions (http://www.marketwatch.com/story/empire-state-factory-index-has-first-positive-reading-in-eight-months-2016-03-15)improved markedly in March, a sign that the factory sector could be stabilizing after months of weakness.

Meanwhile, a rout in oil futures continued on Tuesday, with the U.S. crude benchmark (http://www.marketwatch.com/story/oil-prices-struggle-to-recover-from-mondays-bruising-session-2016-03-15) falling 2.4% to trade near $36 a barrel. The decline weighed on the stocks of energy companies, such as Chesapeake Energy Corporation (CHK), down 4%, Marathon Oil Corporation (MRO), down 2.7%, and Murphy Oil Corporation (MUR), down 3.9%.

In Europe, oil companies led the Stoxx Europe 600 index down 0.6%.

Also read: Buy these stocks if you are bearish on oil, Goldman Sachs says (http://www.marketwatch.com/story/buy-these-stocks-if-youre-bearish-on-oil-goldman-sachs-says-2016-03-14)

(http://www.marketwatch.com/story/buy-these-stocks-if-youre-bearish-on-oil-goldman-sachs-says-2016-03-14)The Dow industrials logged a new closing high for 2016 on Monday (http://www.marketwatch.com/story/us-stock-futures-waver-as-fed-meeting-keeps-investors-on-hold-2016-03-14). But the S&P 500 index finished slightly lower, as energy stocks tracked a sharp slump in oil prices.

In Asia (http://www.marketwatch.com/story/asian-markets-fall-ahead-of-bank-of-japan-meeting-2016-03-14), Chinese stocks rose modestly, but the Nikkei 225 index lost 0.7%. The Bank of Japan left its monetary policy unchanged (http://www.marketwatch.com/story/boj-stands-pat-on-rates-cuts-economic-outlook-2016-03-15), but cut its economic view and paid more lip service to overseas problems, such as European debt and U.S. economic issues. For some analysts, the door is now open to more easing by Japan.

The dollar (http://www.marketwatch.com/story/dollar-leans-on-yen-as-investors-assume-bank-of-japan-isnt-finished-easing-2016-03-15) was down sharply against the yen in the wake of the Bank of Japan decision. Gold prices were under pressure and Treasury yields tumbled.

Fed in focus again

The Federal Reserve's two-day meeting kicks off Tuesday, with a policy decision due Wednesday, followed by a news conference with Fed Chairwoman Janet Yellen. Most expect the Fed to leave monetary policy unchanged (http://www.marketwatch.com/story/fed-may-have-little-reason-to-pause-but-it-will-2016-03-14), and many economists expect just one more interest-rate increase is coming this year, in June.

While the economic backdrop has improved, the possibility of another rate increase makes investors wary about holding riskier assets such as stocks, said Naeem Aslam, chief market analyst at Ava Trade, in a note.

"Yellen may have to play hard to convince the market that another rate increase is not possible this year and they are still truly data dependent and at the benevolence of the world economic health," he said.

Read:Caroline Baum says Fed officials talk themselves into a corner (http://www.marketwatch.com/story/fed-officials-talk-themselves-into-a-corner-2016-03-15)

At 10 a.m. Eastern, a home builders index for March and business inventories for January are due.

Stocks to watch

Shares of Valeant Pharmaceuticals International Inc. (VRX.T) slid 18.3% in premarket after the Canadian drugmaker cut guidance for the current quarter and provided preliminary results for its final quarter of the year that were short of Wall Street's expectations (http://www.marketwatch.com/story/valeant-pharma-slashes-quarterly-forecast-2016-03-15).

FactSet Research Systems Inc. (FDS) gained 5.9% in premarket trade after the company's profit rose 10% in the latest quarter (http://www.marketwatch.com/story/factset-profit-tops-views-as-sales-rise-2016-03-15), as the financial information provider notched sales gains amid a higher user base.

Avon Products Inc. (AVP) could be active after announcing Monday that it would cut around 2,500 jobs and shift its corporate headquarters to the United Kingdom (http://www.marketwatch.com/story/avon-to-cut-2500-jobs-move-headquarters-to-uk-2016-03-14).

(END) Dow Jones Newswires

March 15, 2016 08:59 ET (12:59 GMT)

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