By Barbara Kollmeyer, MarketWatch
Goldman analysts: We are in a period of 'indigestion'
MADRID (MarketWatch)--Stock futures pushed slightly higher on
Wednesday, with signs that Wall Street could be ready to retake
some lost ground after dollar gains triggered the worst loss for
the Dow Jones Industrial Average in five months.
Futures for the Dow Jones Industrial Average (DJH5) rose 50
points, or 0.3%, to 17,716, while those for the S&P 500 index
(SPH5) gained 7.7 points to 2,049.60. Futures for the Nasdaq-100
index (NDH5) rose 12.25 points, or 0.3%, to 4,343.
Tuesday marked a dark day for stocks, erasing 2015 gains for
both the Dow industrials (DJI) and the S&P 500 (SPX) , which
lost 332.8 points and 35.26 points, respectively. Investors focused
on the likelihood of a U.S. interest-rate hike this summer, sending
the dollar on a tear higher.
"The reality is that the market will never be fully ready for
hike in the interest rate, because it is an addiction of cheap
money, which investors are used to, and they are not going to be
happy if you pull that plug," said Naeem Aslam, chief market
analyst at AvaTrade, in a note. "So in short, Miss Yellen will just
have to be strong armed and pull the plug, just like she did with
her tapering decision."
Also read: The blistering pace of dollar's rally is rattling
markets
(http://www.marketwatch.com/story/the-blistering-pace-of-dollars-rally-is-rattling-markets-2015-03-10)
Gains for futures on Wednesday came even as the dollar continued
to push higher against rivals, with the euro (EURUSD) nearing a
12-year low against the greenback at $1.0652.
Some hopeful signs came from Europe, where the Stoxx Europe 600
index was up about 0.8% as the third day of the European Central
Bank's bond-buying program got under way. But investors will be
watching Greece as technical talks between the country's officials
and its creditors begin.
In Asia, the Hong Kong Hang Seng Index hit a two-month low on
weak China economic data
(http://www.marketwatch.com/story/hong-kong-stocks-fall-to-two-month-low-on-weak-china-data-2015-03-11),
though Japan stocks rebounded.
Read: S&P 500 teeters on major technical support
(http://www.marketwatch.com/story/sp-500-teeters-on-major-technical-support-2015-03-10-121031632)
(http://www.marketwatch.com/story/sp-500-teeters-on-major-technical-support-2015-03-10-121031632)'Indigestion'
ahead for markets? The reasoning behind the sharp turn for markets
took some by surprise, though analysts remained sanguine that the
market would eventually calm down. Goldman analysts Noah Weisberger
and Aleksandar Timcenko said up to last week, they expected a
near-term source of U.S. headwinds would be growth concerns.
"But winds have shifted with a looming U.S. tightening as the
current source of market disquiet, which we also think will
ultimately prove benign, though perhaps after some period of
'indigestion'," they said in a note Tuesday.
Stocks to watch: Krispy Kreme Doughnuts Inc.(KKD) and Shake
Shack Inc.(SHAK) will report earnings after the close, but no
companies are expected to release results ahead of the open.
General Mills Inc.(GIS) said late Tuesday that it will raise its
quarterly dividend by 7%
(http://www.marketwatch.com/story/general-mills-hikes-quarterly-dividend-7-2015-03-10).
Shares of VeriFone Systems Inc. (PAY)could follow up losses late
Tuesday after the company's outlook fell below Wall Street
forecasts.
Other markets: Gold (GCJ5) was carving out tiny gains as the
dollar charged ahead. The precious metal hit its lowest levels
since November on Tuesday.
Oil prices
(http://www.marketwatch.com/story/oil-futures-rebound-ahead-of-us-oil-stockpile-data-2015-03-11)(CLJ5)
made marginal gains ahead of an important inventory survey from the
U.S. Energy Information Administration. Late Tuesday, the American
Petroleum Institute, an industry group, said its data showed U.S.
crude stockpiles fell against expectations for a continued rise in
supplies.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires