U.S. stock futures were little changed Wednesday, indicating a
pause for the Dow industrials following two sessions of all-time
highs.
S&P 500 futures lost one point to 2124. E-mini Dow futures
added two points to 18286. E-mini Nasdaq-100 futures were up two
points to 4503. Changes in stock futures don't always accurately
predict moves in the stock market after the opening bell.
The Dow Jones Industrial Average drifted to a record close
Tuesday, adding 0.1% to 18312.39. It was the blue-chip index's
second record in a row and its sixth this year. The S&P 500
lost 0.1% to 2127.83, snapping a three-day winning streak, and the
Nasdaq Composite slipped 0.2% to 5070.03.
Stock-market volume has been light in recent sessions, with
Monday marking the second-slowest day of the year. The stream of
companies reporting first-quarter earnings has slowed in recent
sessions, contributing to the muted action in markets. Including
results from 476 companies in the S&P 500, first-quarter
earnings are on track to rise 0.5% from a year ago, according to
FactSet. In late March, analysts had expected first-quarter
earnings to drop 4.7%.
The Dow has gained 2.6% in May, through Tuesday's close, and the
S&P 500 has advanced 2%. Both indexes are on track for their
biggest monthly gains since February.
"We've quietly crept up to all-time highs," said Art Hogan,
chief market strategist at Wunderlich Securities. "The interesting
part of that is the leadership has shifted. We're seeing the
financials take over leadership," he added.
Financial stocks in the S&P 500 have gained the most this
week and are the second-biggest winners in May, through Tuesday's
close. That marks a change from earlier in the year. For the year,
those stocks are up just 0.9%, lagging the S&P 500's 3.3% gain
in the same period.
The SPDR S&P Regional Banking Exchange-Traded Fund has
gained 2.8% this week and is up 4.2% for the month, through
Tuesday.
Driving gains in financial stocks is the prospect of higher
interest rates. Federal Reserve officials are debating when to
raise short-term rates, which have been held near zero since
December 2008. Financial companies, such as banks, benefit from
higher rates because they are able to charge more on loans. "Higher
interest rates overall increase their net interest margins, which
is a key driver of profitability," said Mr. Hogan.
The Fed will release the minutes from its April policy meeting
on Wednesday at 2 p.m. EDT.
Stock-market moves were muted in Europe. Germany's DAX slipped
0.3% and France's CAC 40 lost 0.2%.
Stocks in Japan ended at a 15-year high after data showed the
country's economy grew at its fastest pace in a year during the
first quarter.
In commodity markets, gold futures added 0.2% to $1209.10 an
ounce. Crude-oil futures gained 1% to $58.58 a barrel.
The yield on the 10-year note was at 2.259%, compared with
2.262% on Tuesday. Yields fall as prices rise.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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