MARKET SNAPSHOT: Wall Street Stocks Set To Run Out Of Fuel After An Upbeat Week
October 09 2015 - 6:46AM
Dow Jones News
By Barbara Kollmeyer, MarketWatch
Alcoa shares drop in premarket after downbeat results
Investors may have trouble pushing U.S. stocks higher on Friday,
with stock futures indicating a struggle at the end of a week that
has delivered sizeable gains.
Some gloomy news came after the close Thursday, as Alcoa Inc.
slashed its outlook for China's production of cars and heavy-duty
trucks. Also, some euphoria after the release of minutes from the
latest Federal Reserve policy meeting seemed to be dissipating.
While global markets pushed higher Friday, futures for the Dow
industrials were barely moving at 16,966, while those for the
S&P 500 index dipped 6 points to 2,005. Futures for the Nasdaq
100 index fell 6.25 points to 4,338.50.
Alcoa (AA) shares dipped 4% in thin premarket trade after the
aluminum producer said it now expects 2015 automotive production
growth in China to be in the range of 1% to 2%
(http://www.marketwatch.com/story/alcoa-slashes-it-outlook-for-chinas-production-of-cars-heavy-duty-trucks-2015-10-08),
down from a previous outlook of 5% to 8% growth. Alcoa's results
are considered the unofficial kickoff of earnings season.
"If last night's Alcoa figures are setting a template for this
latest U.S. reporting season, then markets could see last quarter's
$11 trillion equity valuation collapse being added to," said
Alastair McCaig, senior market analyst at IG. "Once again, the
institutional analysts had set a relatively low bar, and yet Alcoa
still tripped."
Futures pulled back on the heels of Thursday's fifth straight
session of gains for the Dow industrials
(http://www.marketwatch.com/story/wall-street-braces-for-rough-day-ahead-of-fed-minutes-alcoa-2015-10-08),
as it scored a triple-digit gain and closed above 17,000 for the
first time since August. The S&P 500 index rose 0.9% to
2,013.43, closing above its 50-day moving average. Those indexes
are up a respective 3.5% and 3.2% on the week.
Those advances came after Fed minutes showed officials were
reluctant to hike interest rates due to global risk concerns. Mike
O'Rourke, chief market strategist at JonesTrading, criticized the
post-minutes gains, saying they were "another example of today's
broken markets".
"Who is gleaning market-moving insights into three-week-old
minutes while the data has shifted over the subsequent time?" said
O'Rourke in a note. "The equity market is once again in the
position where the price action is the lone bullish catalyst." And
that, he says is the most fleeting of all potential drivers of
asset prices.
Stocks to watch: Outside of post-earnings reaction from Alcoa,
shares of Gap Inc. (GPS) could see some pressure after the fashion
retailer reported late Thursday
(http://www.marketwatch.com/story/gap-reports-downbeat-outlook-sept-sales-drop-2015-10-08)
that total sales fell 1% in September, hit by a stronger dollar and
weakness for its Banana Republic unit.
Shares of Ascena Retail Group Inc.(ASNA) looked set to rise 9%
in premarket trading, after Golden Gate Capital disclosed that it
has a 9% stake in the company
(http://www.marketwatch.com/story/ggc-announces-9-stake-in-ascena-retail-group-2015-10-08).
Shares of Apple Inc.(AAPL) could be active after two reports out
Thursday showed continued declines in personal-computer shipments,
but Apple's market share increasing
(http://www.marketwatch.com/story/apple-shines-in-otherwise-dismal-pc-market-2015-10-08).
Read: Elon Musk: Here's why we call Apple the 'Tesla graveyard'
(http://www.marketwatch.com/story/elon-musk-heres-why-we-call-apple-the-tesla-graveyard-2015-10-09)
Other markets: While U.S. stocks looked set to run out of steam,
Asian shares rallied
(http://www.marketwatch.com/story/asian-markets-rise-after-fed-minutes-cast-doubt-on-rate-hike-2015-10-09)
in the wake of the Fed minutes and hopes for lower U.S. rates for
longer. The Shanghai Composite Index closed up 1.2%, while the
Nikkei 225 index gained 1.6%.
European stocks
(http://www.marketwatch.com/story/european-stocks-climb-for-sixth-day-after-dovish-fed-minutes-2015-10-09)
were also enjoying a rally, driven by gains for commodity-related
stocks.
A weaker dollar
(http://www.marketwatch.com/story/dollar-steadies-in-wake-of-dovish-tone-out-of-fed-minutes-2015-10-09)
gave way to a rally for crude oil
(http://www.marketwatch.com/story/oil-atop-50-as-dollar-falls-market-eyes-possible-producer-collaboration-2015-10-09),
with U.S. futures prices up $1 to $50.39 a barrel. Gold prices
climbed
(http://www.marketwatch.com/story/metals-rally-after-as-us-rate-hike-expectations-fade-2015-10-09)
as the dollar pulled back, gaining $11.10 to $1,155.40 an
ounce.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 09, 2015 06:31 ET (10:31 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.