By Barbara Kollmeyer, MarketWatch
Fed nervousness pushes dollar to multiyear highs against
rivals
MADRID (MarketWatch) -- U.S. stock futures pointed to weakness
for Wall Street on Tuesday, as investors grew increasingly nervous
ahead of next week's Federal Open Market Committee, and the dollar
surged to fresh multiyear highs against rivals.
"Concerns about what the start of Fed rate hiking could do to
risk sentiment, to volatility and to demand for EM and
higher-yielding assets won't go away on their own," said Kit
Juckes, global macro strategist at Société Générale in a note.
Futures for the Dow Jones Industrial Average (DJH5) fell 85
points, or 0.5%, to 17,885, while those for the S&P 500 index
(SPH5) lost 10.90 points, or 0.5%, to 2,066.80. Those for the
Nasdaq-100 (NDH5) dropped 17.75 points, or 0.4%, to 4,395.50.
Wall Street finished modestly higher on Monday
(http://www.marketwatch.com/story/us-stocks-futures-lower-as-bull-market-marks-sixth-anniversary-2015-03-09),
which marked the sixth anniversary of Wall Street's bull market,
but nonetheless ended below last week's record levels. The S&P
500 index (SPX) rose 0.4% to 2,079.43.
Read: The S&P 500 can't fight the market's selloff forever
(http://www.marketwatch.com/story/sp-500-cant-fight-the-markets-selloff-forever-2015-03-09)
The dollar has already made some big moves during the global
day. It surged against the euro (EURUSD) and the Japanese yen
(USDJPY) as investors increasingly took stock of diverging monetary
and economic conditions across the U.S., Europe and Japan.
Nervousness is also setting in ahead of the March 17-18 Federal
Reserve meeting.
Last week's upbeat jobs data has heightened speculation that the
Fed's statement next week might drop a reference to being patient
before raising interest rates.
Gold prices (GCJ5) were down about $10 on Tuesday, as strength
in the dollar dulled demand for the dollar-denominated metal.
Data Tuesday include job openings and wholesale inventories for
January at 10 a.m. Eastern.
Sticking to equities: Analysts at J.P. Morgan said they remain
constructive on U.S. equities, which they note look expensive
relative to history and similar to late-cycle levels, but aren't on
a country-relative basis.
"The U.S. trades at a 2.4 times premium on price/earnings (next
12 months) basis relative to its 10-year history, whereas the U.K.
and eurozone trade at 4.5 times and 3.8 times, respectively.
Further, equities still look attractive on a cross-asset basis,
given the current yield environment and few attractive investment
alternatives," said the team of strategists led by Dubravko
Lakos-Bujas.
Read: This 6-year-old bull market's big winners: biotech, pharma
and value stocks
(http://www.marketwatch.com/story/this-6-year-old-bull-markets-big-winners-biotech-pharma-and-value-stocks-2015-03-09)
Stocks to watch: Shares of Apple Inc.(AAPL) could stay in focus
for investors a day after the company revealed its new wearable
Apple Watch
(http://www.marketwatch.com/story/apple-shows-off-new-smartwatch-macbook-2015-03-09).
Barnes & Noble Inc. (BKS) will release results ahead of the
market's open, while VeriFone Systems Inc.(PAY) will report after
the close.
Urban Outfitters Inc.(URBN) could be active after earnings
topped analysts forecasts late Monday.
Qualcomm Inc.(QCOM) announced a $15 billion share buyback plan
and lifted its quarterly dividend to 48 cents a share from 42
cents, effective March 25.
Other markets: The Nikkei 225 index
(http://www.marketwatch.com/story/chinese-stocks-retreat-after-data-fuel-deflation-fears-2015-03-10)
finished 0.7% lower
(http://www.marketwatch.com/story/chinese-stocks-retreat-after-data-fuel-deflation-fears-2015-03-10),
despite a weaker yen, which in the past has proved a boost for
stocks and exporters. Stocks fell amid reports that the Basel
Committee on Banking Supervision may ask banks to raise capital.
Chinese stocks fell after data showed China's wholesale deflation
worsened in February.
European stocks were flat to weaker. Greece debt talks between
Athens and its international creditors will resume on
Wednesday.
Oil prices
(http://www.marketwatch.com/story/oil-prices-hanging-on-fresh-supply-data-2015-03-10)(CLJ5)
pulled back as investors awaited fresh supply data, with the U.S.
Energy Information Administration's monthly report due later
Tuesday.
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