By Barbara Kollmeyer, MarketWatch
China rate cut brushed aside as Greek worries build
U.S. stock futures struggled to find direction on Monday, as
investors brushed aside a Chinese rate cut and waited to see if
Wall Street will follow up on last week's jobs-fueled rally.
Futures for the Dow Jones Industrial Average (YMM5) slipped 10
points to 18,111, while those for the S&P 500 index (ESM5)
eased 1.1 points to 2,106.75. Futures for the Nasdaq-100 index
(NQM5) fell 2.5. points to 4,446.25.
Friday's jobs report suggested the economy was on a solid
footing, but it wasn't strong enough to move up the timing of the
first rate hike by the Federal Reserve, said analysts. That
"Goldilocks" report triggered the biggest one-day point gain for
the Dow industrials (DJI) in more than a week. Friday's gains
(http://www.marketwatch.com/story/us-stocks-a-cautious-move-higher-as-big-jobs-data-looms-2015-05-08)
helped both the Dow and the S&P 500 finish a turbulent week
modestly higher.
Read: 'Earnings recession' on hold as quarter shows fractional
gain
(http://www.marketwatch.com/story/earnings-recession-on-hold-as-quarter-showing-fractional-gain-2015-05-10)
(http://www.marketwatch.com/story/earnings-recession-on-hold-as-quarter-showing-fractional-gain-2015-05-10)Dan
Greenhaus, chief strategist at BTIG, said stocks could resume that
strong run-up on Monday. "Strength in transports and small caps is
giving some confidence those levels can be exceeded, and perhaps
the news out of China is just the final push equities needed," he
said in a note.
The People's Bank of China on Sunday cut its benchmark lending
and deposit rates by a quarter of a percentage point
(http://www.marketwatch.com/story/china-cuts-rates-as-economic-slowdown-deepens-2015-05-10).
"However, the third rate cut in six months is creating fears
that Chinese growth will have to be manufactured by policy changes
rather than built on more-robust growth foundations, limiting the
feel-good factor for Western markets," said Rebecca O'Keeffe, head
of investment at stockbroker Interactive Investor, in a note.
Read: Don't buy into this jobs-fueled rally, market timer warns
(http://www.marketwatch.com/story/dont-buy-into-this-jobs-fueled-rally-market-timer-warns-2015-05-08)
(http://www.marketwatch.com/story/dont-buy-into-this-jobs-fueled-rally-market-timer-warns-2015-05-08)European
markets
(http://www.marketwatch.com/story/european-stocks-edge-higher-but-greek-worries-limit-gains-2015-05-11)
also failed to get a lift from China's rate cut. Investors are
being distracted by a meeting in Brussels of eurozone finance
ministers, who will try again to broker a deal on Greece's bailout
money. The country faces a 750-million-euro ($837 million) loan
repayment to the International Monetary Fund on Tuesday. The Greece
ASE Composite index was down more than 3% in early trading.
Read: 'Groundhog week for Greece'--analysts downbeat on
Eurogroup outcome
(http://www.marketwatch.com/story/groundhog-week-for-greece-analysts-downbeat-on-eurogroup-outcome-2015-05-11)
The only data of note for Monday is the labor-market conditions
index for April, due around 10 a.m. Eastern Time.
Earnings season is doing a slow wind-down, with only 14 S&P
500 companies due to report this week. Dean Foods Co. (DF), Dish
Network Corp. (DISH) and Sotheby's (BID) are all scheduled to post
earnings ahead of the opening bell for Monday.
Other markets: Chinese stocks
(http://www.marketwatch.com/story/chinese-stocks-rally-as-pboc-cuts-interest-rates-again-2015-05-11)
rose for a second session on the heels of those rate cuts, with the
Shanghai Composite Index gaining 3%. The Nikkei 225 index rose 1.3%
to its best close since late April.
The dollar
(http://www.marketwatch.com/story/euro-lower-on-greek-fears-ahead-of-eu-ministers-meeting-2015-05-11)(DXY)
moved higher across the board, with the euro dipping on jitters
about Greece. Gold prices(GCM5) were marginally lower, along with
crude-oil prices
(http://www.marketwatch.com/story/crude-oil-futures-struggle-for-direction-after-us-jobs-data-supply-rise-2015-05-11)(CLM5).
Subscribe to WSJ: http://online.wsj.com?mod=djnwires