MARKET SNAPSHOT: U.S. Stock Futures Extend Losses After Mixed Data
March 15 2016 - 9:14AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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