By Anora Mahmudova and Barbara Kollmeyer, MarketWatch Oil, gold
give up gains
NEW YORK (MarketWatch) -- U.S. stocks were pointing to a rebound
on Tuesday after a bruising on Monday, but a big retreat in
commodity prices was putting some pressure on premarket gains.
In choppy action, futures for the Dow Jones Industrial Average
(DJZ4) rose 35 points to 17,790, while those for the S&P 500
index (SPZ4) added 2.8 points to 2,053.6. Futures for the
Nasdaq-100 index (NDZ4) gained 8 points to 4,295.
U.S. stocks were swept up in a wave of selling on Monday,
triggered by weak global data, and led by energy and retail
sectors. The S&P 500 (SPX) and Dow industrials (DJI) each
suffered the biggest one-day losses since Oct. 22, dropping 0.7%
and 0.3% respectively. The Nasdaq Composite (RIXF) slid 1.3%,
dragged by a volatile session primarily in Apple Inc.((AAPL).
Construction spending for October is coming at 10 a.m. Eastern
Time, while automobile sales for November are the only other piece
of data on the calendar. Bigger data come Friday with the highly
anticipated jobless data.
"With so many key events in the coming days, I wouldn't be
surprised to see a little risk aversion creeping into the markets,
as traders position themselves ahead of some potentially higher
market volatility," said Craig Erlam, market analyst, at Alpari
U.K., in a note.
Stanley Fisher, vice chairman of the Federal Reserve, speaking
at The Wall Street Journal CEO Council annual meeting in
Washington, D.C. said that continued labor market improvement and
just "some signs" that inflation is beginning to stir would be
enough for the U.S. central bank to lift-off interest rates. If
inflation continues to move lower, then the Fed will have to take
that into account, Fischer said.
Commodities volatile: Oil and precious metals were giving up
gains earned in the prior session. After more than 4% rebound for
oil prices on Monday, January crude prices(CLF5) were down more
than 1%. Opinion: OPEC cannot outlast the U.S. on oil prices
Gold prices also gave back some of Monday's rally, with February
futures(GCG5) off 1.4% and the precious metal struggling to hold on
to $1,200 an ounce level. What silver's biggest move in two years
means
Investment banks continued to roll out their predictions for
2015. Citigroup is forecasting the S&P 500 will return 8.5% by
the end of 2015, for a level of 2,200, and sees outperformance for
Japan and emerging-market stocks. That prediction is in line with
that of Dan Greenhaus, strategist at BTIG, who said the main reason
for his own muted expectations is the fact that the first rate hike
by the Federal Reserve -- expected next year -- will be taken badly
by stocks. Fed to stay aggressive in 2015 as it battles
'lowflation'
Stocks in focus:General Motors Co.(GM.XX) and Ford Motor Co.(F)
are due to release sales figures for November. GM is expected to
report that sales edged up 0.6% to 213,418 units last month from a
year earlier, according to Edmunds.com. Ford is likely to see its
sales down 1.4% to 186,984 units.
Shares of Royal Caribbean Cruises Ltd.(RCL) were up nearly 5% in
premarket after being added to the S&P 500.
Avanir Pharmaceuticals Inc.(AVNR) was up 14% in premarket after
the company said it will be acquired by Japan's Otsuka
Pharmaceutical Co. in a $3.5 billion deal, which will pay $17 per
share for Avanir.
Shares of Cypress Semiconductor Corp.(CY) soared 12%, while
Spansion Inc.(CODE) surged 17% after the companies announced a $4
billion stock merger late Monday. See Movers
Overseas markets: The FTSE 100 index was eyeing its first win in
four days as oil and mining stocks rebounded from Monday's trade.
Energy stocks were also driving gains for Europe , and rally action
was also seen across Asia. The Shanghai Composite rallied 3%, led
by brokerages and banks. The People's Bank of China held back from
draining funds from the banking system on Tuesday, which analysts
said has triggered speculation that a cut in reserve requirements
could come soon.
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