By Sara Sjolin, MarketWatch
Best Buy surges 16% after beating Wall Street expectations
U.S. stocks were set for an upbeat trading day Tuesday as
investors shook off another steep slide in oil prices and instead
looked ahead to Federal Reserve Chairwoman Janet Yellen's speech at
Jackson Hole.
An update on manufacturing activity and new-home sales data due
Tuesday morning were also in the spotlight.
Futures for the Dow Jones Industrial Average gained 52 points,
or 0.3%, to 18,571, while those for the S&P 500 index added
6.10 points, or 0.3%, to 2,187. Futures for the Nasdaq-100 index
climbed 14.25 points, or 0.3%, to 4,826.
The implied gains follow lackluster action on Monday
(http://www.marketwatch.com/story/dow-futures-tread-water-as-buyers-wont-jump-in-until-yellen-speaks-2016-08-22),
when the mood turned cautious as oil prices tumbled. Hopes faded
that members of the Organization of the Petroleum Exporting
Countries will agree on a production freeze deal next month.
Investors also were playing a waiting game ahead of a retreat of
Fed central bankers and economists at Jackson Hole, Wyo., on
Friday, where Yellen will be watched for hints about U.S. monetary
policy.
"We could continue to see an element of caution in the markets
in the lead up to this. Investors are still not buying a 2016 rate
hike, even following [Fed Vice Chairman] Stanley Fischer's comments
over the weekend regarding the economy," said Craig Erlam, senior
market analyst at Oanda, in a note. On Sunday, speaking at a
conference sponsored by The Aspen Institute
(http://www.marketwatch.com/story/feds-fischer-we-are-close-to-our-targets-2016-08-21),
Fischer said the central bank is within reach of its twin goals of
inflation of about 2% and healthy employment.
"The only question is whether [Yellen will] strongly hint at a
hike this year or indicate that holding off to early next year may
be warranted, at which point markets would push the hike right back
once again," he added.
Read:Why economists aren't willing to give hawks like Fischer
the benefit of doubt
(http://www.marketwatch.com/story/economists-not-willing-to-give-hawks-like-fischer-benefit-of-doubt-2016-08-22)
The market is pricing in a 15% probability of a rate increase in
September and a 48.1% chance of it happening in December, according
to CME's Fed Watch Too
(http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html)l.
Read:Yellen to say 'ready' for another rate hike in Jackson Hole
(http://www.marketwatch.com/story/yellen-to-say-ready-for-another-rate-hike-in-jackson-hole-2016-08-19)
The dollar dropped
(http://www.marketwatch.com/story/dollar-slips-as-investors-remain-cautious-ahead-of-jackson-hole-2016-08-23)
against all major currencies on Tuesday as investors held off. The
ICE dollar index slipped 0.2% to 94.362.
Economic news: Data out on Tuesday will be closely watched for
any indication they weaken or strengthen the case for a Fed
interest rate hike. The preliminary reading of the manufacturing
purchasing managers index for August is due at 9:45 a.m. Eastern
Time, and it is forecast to have eased to 52.8 from 52.9 in July,
according to FactSet estimates.
At 10 a.m. Eastern, new home-sales numbers for July are
scheduled for release. They are expected to show an annual rate of
579,000, down from June's seven-year high of 592,000
(http://www.marketwatch.com/story/new-home-sales-power-ahead-rising-to-7-year-high-592000-annual-pace-2016-07-26).
See:
There were no Fed speakers scheduled to speak on Tuesday.
Oil blues: Crude-oil prices continued to slide, as Goldman Sachs
said the oil market still looks weak and that prices are likely to
stay in the $45-$50 range through next summer. The investment bank
also said any OPEC production freeze would "likely prove
self-defeating" because it could encourage producers outside the
cartel to ramp up output.
Read:Not even OPEC can save the struggling oil market now,
Goldman says
(http://www.marketwatch.com/story/not-even-opec-can-save-the-struggling-oil-market-now-goldman-says-2016-08-23)
Crude-oil futures lost 0.8% to $47.03 a barrel on Tuesday
(http://www.marketwatch.com/story/oil-prices-slide-further-as-iraq-prepares-to-ramp-up-exports-2016-08-23),
while Brent dropped 0.9% to $48.74 a barrel.
Movers and shakers: Shares of Best Buy Co. Inc.(BBY) surged 15%
ahead of the bell after the consumer-electronics retailer posted
earnings ahead of forecasts
(http://www.marketwatch.com/story/best-buys-stock-soars-toward-10-month-high-after-profit-sales-beat-expectations-2016-08-23).
Toll Brothers Inc.(TOL) slipped 1.1% in premarket trade even as
the home builder reported a 58% rise in third-quarter profit
(http://www.marketwatch.com/story/toll-brothers-profit-matches-views-sales-top-2016-08-23).
Zoe's Kitchen Inc.(ZOES) slumped 16% after the fast-casual
restaurant chain late Monday cut its guidance for the fiscal year
(http://www.marketwatch.com/story/zoes-kitchen-shares-fall-as-guidance-is-cut-2016-08-22-184854647).
Wells Fargo & Co.(WFC) may also move after the Consumer
Financial Protection Bureau said Monday it fined the bank $3.6
million
(http://www.marketwatch.com/story/cfpb-fines-wells-fargo-36-million-for-deceptive-student-loan-practices-2016-08-22)
for illegal student loan servicing.
Mobileye NV(MBLY) rose 4.3% and Delphi Automotive PLC(DLPH) was
flat after news the two are joining forces to develop self-driving
technology
(http://www.marketwatch.com/story/delphi-mobileye-team-up-to-develop-self-driving-tech-for-car-makers-2016-08-23)
for car makers.
Other markets: Asian shares closed mostly higher
(http://www.marketwatch.com/story/little-movement-from-asian-markets-ahead-of-fed-meeting-2016-08-22),
while European stocks rose across the board
(http://www.marketwatch.com/story/european-stocks-step-higher-as-pmi-data-rolls-in-2016-08-23)
after PMI data showed the eurozone recovery picking up pace
(http://www.marketwatch.com/story/eurozone-economic-recovery-picking-up-despite-brexit-pmis-show-2016-08-23).
Metals prices were mostly higher, with gold up $1.20.
(END) Dow Jones Newswires
August 23, 2016 09:04 ET (13:04 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.