MARKET SNAPSHOT: Dow Could Carve Out Record As Italy Fears Fade
October 03 2018 - 7:21AM
Dow Jones News
By Ryan Vlastelica
Dow has risen for four straight sessions
U.S. stock-index futures rose modestly on Wednesday, suggesting
major indexes could hit records again as news reports suggested
Italy's government could avoid a collision with the European Union
over its budget, potentially averting a source of financial market
turmoil.
Where are the major benchmarks trading?
Futures for the Dow Jones Industrial Average rose 58 points, or
0.2%, to 26,865. S&P-500 futures gained 7 points to 2,935.75, a
rise of 0.2%. Nasdaq-100 futures gained 20 points to 7,672, a rise
of 0.3%.
The Dow is coming off a record close
(http://www.marketwatch.com/story/stock-futures-fall-trade-and-italy-remain-in-focus-2018-10-02),
its 14th of the year, as well as its fourth straight daily gain.
The S&P 500 ended in slightly negative territory on Tuesday,
while the Nasdaq recorded a solid loss. At current levels, the Dow
is less than 0.2% below its intraday record, and the move implied
by futures suggested it could carve out a new all-time high on
Wednesday. The S&P is 0.6% below its own record, while the
Nasdaq is 1.6% under its intraday peak.
What's driving markets?
Wall Street got an early lift on Wednesday after a report in
Italian daily newspaper Corriere della Sera that the government may
yield ground
(http://www.marketwatch.com/story/euro-rebounds-after-report-italy-will-play-by-eus-budget-deficit-rules-2018-10-03)
in a budget stalemate with the EU. According to the report, Italy's
budget deficit target will be set at 2.4% of GDP in 2019, but
decline to 2.2% in 2020 and 2.0% in 2021. Italian officials had
previously clashed with Brussels over the budget deficit target,
which exceeded EU rules and stoked fears of another crisis
(http://www.marketwatch.com/story/for-italy-the-euro-is-unrenouncable-its-prime-minister-reassures-2018-10-02)
in the region.
While U.S. stocks have mostly shrugged off political
uncertainties from across the globe -- in addition to Italy's
budget, investors have looked past the UK's Brexit negotiations and
the myriad issues surrounding U.S. trade policy with other major
economies -- a resolution of this issue would mean one less
potential risk to watch out for.
Wednesday will be marked by comments from a number of officials
from the Federal Reserve, including Chicago Fed President Charles
Evans and Richmond Fed President Thomas Barkin before the market
opens. In the afternoon, Cleveland Fed President Loretta Mester is
scheduled to speak, as is Lael Brainard, a governor on the Fed's
board. Finally, Jerome Powell is scheduled to speak at 4 p.m. ET.
On Tuesday, Powell, reiterated that he did not see signs that
inflation could spike despite the low unemployment rate.
The comments came after the Fed last week raised rates for the
third time this year and indicated it would do so again in
December.
On the economic data front, the September report on
private-sector employment from ADP will be released at 8:15 a.m.
The report is the first of three readings on the labor market that
will be released this week. Thursday will see the latest data on
jobless claims, while Friday has the closely watched September jobs
report.
Two reads on the services sector, from both the Institute from
Supply Management and Markit, are also coming out on Thursday.
What are market analysts saying?
When it comes to Italy's budget, "the issue is compliance with
EU rules," said Marshall Gittler, chief strategist at ACLS Global.
"If Italy flouts EU rules, then the other countries are not likely
to come to its rescue if and when it gets into financial trouble --
as it has in the not-so-distant past. It's the politics behind the
move, not the economics. If Italy cooperates with the EU, then the
EU is more likely to cooperate if necessary."
What stocks are in focus?
Facebook Inc.(FB) photo-sharing social network Instagram
suffered a world-wide outage Wednesday
(http://www.marketwatch.com/story/facebooks-instagram-suffers-worldwide-outage-as-new-head-of-app-takes-over-2018-10-03)
but has since resumed service for most users, a glitch that comes
just days after it named a new head of the app.
Novartis AG(NOVN.EB) entered into a licensing and equity
agreement
(http://www.marketwatch.com/story/novartis-inks-licensing-deal-with-boston-pharma-2018-10-03)
with Boston Pharmaceuticals to develop three anti-infective drug
candidates that are part of the Swiss company's infectious diseases
portfolio.
Vodafone Group PLC's (VOD.LN) Italian subsidiary has paid $2.77
billion for four licenses
(http://www.marketwatch.com/story/vodafone-pays-eur24-bln-in-italy-5g-auction-2018-10-03-24852711)
in Italy's 5G-bandwidth auction, the country's Ministry of Economic
Development said late Tuesday.
Where are other markets trading?
Asian stocks traded near break-even levels
(http://www.marketwatch.com/story/nikkei-hang-seng-about-flat-after-making-up-early-losses-2018-10-02),
recovering from early losses. Major European indexes rose,
supported by optimism over Italy.
Crude-oil prices rose 0.1% while gold was unchanged on the day.
The U.S. Dollar Index was slightly lower, with the euro also
getting a bid from Italy.
(END) Dow Jones Newswires
October 03, 2018 07:06 ET (11:06 GMT)
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