By Barbara Kollmeyer, MarketWatch
Greece worries resurface for investors; China rate cut brushed
aside
Sluggish stock-index futures suggest Wall Street could struggle
to push higher on Monday, as investors look set to cash in on some
of last week's gains and fret over Greece's debt problems.
Meanwhile, interest-rate cuts out of China over the weekend
seemed to impress few.
Futures for the Dow Jones Industrial Average (YMM5) was flat at
18,124, while those for the S&P 500 index (ESM5) added 3 points
to 2,108. Futures for the Nasdaq-100 index (NQM5) added 1 point to
4,449.75.
Friday's jobs report suggested the economy was on 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)
(http://www.marketwatch.com/story/earnings-recession-on-hold-as-quarter-showing-fractional-gain-2015-05-10)But
early Monday, it looked like stocks would struggle to build on
those gains. Craig Erlam, senior market analyst at OANDA, said some
investors will be cashing in as the S&P 500 trades near
all-time highs, especially as there is little reason for levels to
be broken right now.
"The U.S. has just been through a very difficult first quarter,
and the Fed is contemplating raising rates. Neither of these are
consistent with equity markets breaking into uncharted territory,"
he said in a note.
Another factor weighing on futures was Greece's bailout talks,
which are taking place in Brussels Monday. Little progress is
expected, as Greece's 750-million-euro ($837 million) loan
repayment to the International Monetary Fund due Tuesday looms. The
Greece ASE Composite index was down nearly 3%.
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)
No boost from China: 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)
(http://www.marketwatch.com/story/china-cuts-rates-as-economic-slowdown-deepens-2015-05-10),
but neither the U.S. nor Europe markets seemed to get much benefit
from the signs of more stimulus.
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 brokerage firm 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)The
only data of note for Monday is the labor-market conditions index
for April, due 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. Dish Network Corp. (DISH)
said it lost subscribers, but profit doubled. Sotheby's (BID)
profit and revenue topped forecasts. Dean Foods Co. (DF) is also
due to report.
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).
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