By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- U.S. stock futures pushed south on
Wednesday amid some concerns the rally could be running out of some
steam, though no big action was expected ahead of the minutes of
the latest Federal Open Market Committee meeting.
Shares of Apple Inc. were slightly higher in premarket after
setting a closing record on Tuesday, while Lowe's Cos. fell on
results.
Futures for the Dow Jones Industrial Average (DJU4) fell 18
points to 16,863, while those for the S&P 500 index (SPU4)
eased 2.6 points to 1,974.60. Futures for the Nasdaq-100 index
(NDU4) fell 2.75 points to 4,031.50.
No economic events are on Wednesday's calendar beyond the
minutes of the July 29-30 FOMC meeting. Some of the language in the
July policy statement was more hawkish, with the Fed dropping
language describing the jobless rate as "elevated," instead noting
"a range of labor market indicators suggests that there remains
significant under-utilization of labor resources."
"The question which everyone will be asking is if the Fed are
ready to increase the interest rate sooner rather than later. Some
hawkish members have certainly started beating the drums of an
early increase," said Naeem Aslam, chief market analyst at Ava
Trade.
Read: Morgan Stanley's take on the Fed's exit plan
While investors may glean clues about the Federal Reserve's exit
strategy from the minutes, markets may also quickly move past them
to focus on Fed Chairwoman Janet Yellen's speech on Friday morning
(10 a.m. Eastern Time) in Jackson Hole, Wyo. Read: Yellen to stress
patience on rates at Jackson Hole
U.S. stocks were buoyed on Tuesday by better-than-expected
housing starts and a handful of upbeat earnings. The S&P 500
index (SPX) rose 0.5%, to close at 1,981.60, while the Dow
industrials (DJI) gained 0.5% to end at 16,919.59. The Nasdaq
Composite (RIXF) added 0.4% to finish at 4,527.51, scoring its
highest close since March 31, 2000 for the second session in a
row.
What strategists are saying: Wall Street has seen a boost in
recent sessions due to a lack of upheaval on the geopolitical
front, but this rally looks to be running out of steam, said Joao
Monteiro, analyst at Valutrades, in a note to investors.
"This is perhaps no real surprise -- markets are now nudging
back into that inflated territory and there is still the risk of
one or more of the conflict hot-spots escalating significantly,
although the risk-on trade remains in favor -- we have USD/JPY
(USDJPY) back above Yen103 and gold (GCZ4) resolutely below
$1,300/oz," he said.
If the Fed minutes show another bias, Monteiro said equities
"could well find an excuse to move higher once again."
Investors should keep buying the dips in this market, because
it's just showing signs of a maturing bull phase, rather than
"warning of an impending market turnaround," said strategists at
Citigroup in a recent note. Among the five measures they look at,
stock-return volatility across sectors remains stubbornly low and
doesn't suggest a narrowing of the market, say the Citi
analysts.
Also read: Wednesday's Need to Know: The 'short of the decade'
and one willful bull's call for Dow 19,000
Movers & shakers: Apple Inc. (AAPL) nailed an all-time
split-adjusted closing high of $100.53 on Tuesday, and shares were
trading above that in premarket, around $100.85 per share. Read: 7
reasons why this product cycle will be different for Apple
Lowe's Cos. (LOW) fell 3% in premarket trading after the company
cut its 2014 sales outlook.
Digital Ally Inc. (DGLY) jumped 6% in after-hyours trade Tuesday
on a report that police officers tend to use less force when
wearing cameras. The company makes wearable cameras for law
enforcement.
Shares of PetSmart Inc. (PETM) rose 3% in after-hours trade
Tuesday after the pet-supplies retailer said it was exploring
"strategic alternatives," including a possible sale of the company.
It also reported second-quarter earnings that beat forecasts.
La-Z Boy Inc. (LZB) could see premarket pressure after a
late-trade drop, which came after earnings fell short of forecasts.
The furniture-maker also said its board had approved a buyback of
up to 5 million additional shares.
Hertz Global Holdings Inc. (HTZ) shares could come under
pressure premarket after the rental-car company said it expects to
be "well below the low end" of guidance, due to operational
challenges and costs from restating its financial statements for
the last three years.
Real Goods Solar Inc. (RGSE) fell 18% in late trade and could
see premarket pressure after the company posted a loss and said its
chief executive Kam Mofid had resigned, with Dennis Lacey taking
his place.
Other markets: The British pound (GBPUSD) rose against the
dollar, after the minutes of the Bank of England's latest policy
meeting showed a split vote for the first time in three years. Two
members voted for a rate hike. The FTSE 100 index eased, while the
Stoxx Europe 600 index was flat. Russia and Ukraine worries hurt
Carlsberg AS , which slid over 4% after it warned that problems due
to that conflict will have a bigger-than-expected hit on full-year
earnings than initially thought.
In Asia, markets made moderate gains, outside a small loss for
the Shanghai Composite Index . The dollar hit multi-month highs
against the yen, British pound and euro on the heels of U.S.
home-construction data from Tuesday.
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