By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- U.S. stock futures dipped on Monday,
with the Dow Jones Industrial Average threatening to move further
below the key 17,000 level breached late last week, while deal news
sent shares of Family Dollar Stores Inc. soaring in premarket.
Home-sales data will kick off a busy few days for economic
updates, the biggest of which will be payrolls on Friday, while
investors will also get a Federal Open Market Committee decision
mid-week. And while the earnings schedule for Monday is lighter --
Tyson Foods Inc. and Coach Inc. -- the rest of the week will
deliver plenty of big names.
Futures for the Dow Jones Industrial Average (DJU4) eased 13
points to 16,878, while those for the S&P 500 index (SPU4) fell
1.6 points to 1,969.80. Futures for the Nasdaq-100 index (NDU4)
were off 1.75 points to 3,953.70.
Pending home sales for June will be released at 10 a.m. Eastern
Time. Between Wednesday and Friday, investors will get
second-quarter gross domestic product, a Fed decision and July
payrolls among other economic items of importance. Get ready for 48
hours of economic fury
Some market apprehension for Monday could be understandable
after Wall Street's performance on Friday, which saw the Dow
industrials (DJI) drop below 17,000. The benchmark lost 123.23
points, or 0.7%, to 16,960.57, weighed down by losses in Visa Inc.
(V). For the week, the blue-chip index fell 0.8%, its biggest
weekly loss since June 14.
The S&P 500 (SPX) closed 9.6 points, or 0.5%, lower at
1,978.34 and finished the week more or less where it started, while
the Nasdaq Composite (RIXF) managed a weekly gain of 0.4%.
Fears of a bubble-bursting won't rest, said Joao Monteiro,
analyst at Valutrades. "This story may be looking a little
over-brokered, but with the quiet summer sessions lying ahead, even
just a small shock could be all it takes to precipitate a big
move," he said in a note to clients. Stock trader who called three
crashes sees 20% collapse
Goldman Sachs on Friday cut its three-month view on global
stocks to neutral, over concerns a temporary bond selloff could hit
equities.
The analysts maintained an underweight on the U.S. on both a
three-and 12-month basis. "We expect reasonable returns for the
U.S. on an absolute basis over the coming year, but relative to
other markets, the longer-term recovery potential is smaller given
already high margins and strong performance so far," said the
analysts.
Mid-July, Goldman raised its year-end target for the S&P 500
index to 2,050 from 1,900, making the investment bank one of the
most bullish on Wall Street.
Stocks on the move Monday included Family Dollar Stores (FDO),
up 20% in thin premarket trading after Dollar Tree Inc. (DLTR) said
it would buy the rival discount retailer for $74.50 a share. Dollar
Tree shares were up around 3%.
Among Monday's earnings reports, Tyson Foods (TSN) posted a
profit of 73 cents a share, and adjusted per-share income from
continuing operations of 75 cents a share. Coach (COH) will also
report ahead of the market open.
In Europe on Friday, LVMH Moët Hennessy Louis Vuitton shares
tumbled nearly 7% after the luxury-goods group posted a 4% fall in
first-half profit, citing negative effects from exchange rates.
That news knocked Europe's entire luxury-goods sector.
Herbalife Ltd. (HLF) will report after the close on Monday.
Herbalife, Tyson, General Growth are stocks to watch
Across other markets, Hong Kong's Hang Seng Index closed at
highs not seen in more than three years on Monday, after reports
that a plan to allow direct stock trading between Hong Kong and
Shanghai could be launched mid-October. European stocks had trouble
making headway as U.S. stock futures leaned south.
Oil prices (CLU4) pushed lower, while gold (GCU4) was a touch
higher, and the U.S. dollar index(DXY), which measures the
greenback against a basket of six other currencies, was largely
steady.
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