RAD Rite Aid Corp

By Barbara Kollmeyer, MarketWatch

Gold rises more than 1%

Stock futures pointed to a weaker start for Wall Street on Thursday, as investors assessed minutes of the Federal Open Market Committee and concluded there may be a few more hawks than they expected.

Oil gave up gains and investors ploughed money into gold and the yen.

Extending earlier losses, Dow Jones Industrial Average futures fell 85 points, or 0.5%, to 17,546, while S&P 500 futures fell 9.7 points, or 0.5% to 2,050.75. Nasdaq-100 futures lost 22.25 points, or 0.5%, to 4,513.50.

U.S. stocks closed solidly in the green on Wednesday (http://www.marketwatch.com/story/us-stock-futures-edge-higher-as-oil-jumps-2016-04-06), boosted by higher oil prices and minutes from the Federal Reserve's latest policy meeting (http://www.marketwatch.com/story/sentiment-on-fed-running-against-april-rate-hike-minutes-show-2016-04-06), which showed a reluctance among members to raise interest rates as soon as April.

Connor Campbell, financial analyst at SpreadEx said an April hike is off the table, but "the fact that there appears to be a slight increase in the number of hawks in the central bank (with some members open to an April hike) may have spooked investors," in a note to clients.

The prospects of dovish Fed and a Bank of Japan that may not intervene to support its currency, sent the dollar (http://www.marketwatch.com/story/dollar-slides-to-fresh-18-month-low-vs-yen-as-market-bets-on-no-boj-intervention-2016-04-07) to fresh 18-month lows against the yen . The pair last traded around Yen108.r3, at levels not seen since late October 2014, and sharply below the Yen109.79 seen late Wednesday in New York.

All the normal ingredients for an equities rally are there -- dovish Fed, small lift in oil prices -- but markets have also been dealing with hefty volatility since the start of the year and mid-February, said Brenda Kelly, head analyst, London Capital Group.

"We remain at the mercy of the oil market and decisions on freezing or cutting on April 17th in Doha will likely set the tone for equity markets too," said Kelly, in emailed comments. Oil prices (http://www.marketwatch.com/story/oil-prices-higher-on-surprise-fall-in-crude-inventories-2016-04-07) traded flat on Thursday, erasing an earlier lead.

She said potential for corporate defaults is another factor that appeared to be hitting sentiment. The next wave of such defaults could hit investors harder than ever, Bloomberg (http://www.bloomberg.com/news/articles/2016-04-05/the-coming-default-wave-is-shaping-up-to-be-among-most-painful) reported on Thursday.

In his annual letter to shareholders, J.P. Morgan Chase & Co. (JPM) Chief Executive James Dimon warned that increased market volatility is likely here to stay, even as he argued that his firm is getting progressively stronger and safer (http://www.marketwatch.com/story/market-volatility-is-here-to-stay-says-jp-morgans-dimon-2016-04-06).

Data docket: The economic calendar for the U.S. is fairly thin, with just weekly jobless claims coming at 8:30 a.m. Eastern Time and consumer credit for February due at 3 p.m. Eastern.

Federal Reserve Chairwoman Janet Yellen will hold conversations with former Federal Reserve Chairmen Ben Bernanke and Alan Greenspan at the International House in New York City at 5:30 p.m. Eastern.

Kansas City Fed President Esther George will speak on the economy in York, Nebraska at 8:15 p.m. Eastern.

Read: Fed's Bullard suggests boosting U.S. growth via tax reform (http://www.marketwatch.com/story/feds-bullard-boost-us-growth-via-tax-reform-2016-04-07)

Stocks to watch: ConAgra Foods Inc. (CAG) beat profit and sales expectations (http://www.marketwatch.com/story/conagra-beats-profit-and-sales-expectations-2016-04-07).

Rite Aid (RAD) topped the Street's view with profit but missed with sales (http://www.marketwatch.com/story/rite-aid-beats-profit-expectations-but-misses-on-sales-2016-04-07).

L Brands Inc.'s (LB) Victoria's Secret announced layoffs as part of a restructuring that will also cut some of its merchandise categories.

Sprint Corp. (S) said late Wednesday it reached a deal (http://www.marketwatch.com/story/sprint-reaches-deal-to-sell-and-lease-back-assets-to-raise-22-billion-2016-04-06) with several bankrupt entities to sell and then lease back network assets which will then be used as collateral to raise $2.2 billion.

Other markets: The Stoxx Europe 600 turned lower, ahead of minutes due from the latest European Central Bank meeting later in the day.

Read:ECB could launch more stimulus, says Praet (http://www.marketwatch.com/story/ecb-could-launch-more-stimulus-says-praet-2016-04-07)

In Asia, the Nikkei 225 index closed slightly higher. The Shanghai Composite Index slid 1.38% as investors fretted over a three-month ban on large shareholders selling domestic stocks that's about to expire soon.

Gold prices surged $15.90, or 1.3%, to $1,240 an ounce

(END) Dow Jones Newswires

April 07, 2016 07:59 ET (11:59 GMT)

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