By Ryan Vlastelica
Dow aiming for 5-day win streak
U.S. stock-index futures pointed to a higher open 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 85 points, or
0.3%, to 26,891. S&P-500 futures gained 10 points to 2,938.75,
a rise of 0.3%. Nasdaq-100 futures gained 31 points to 7,684, a
rise of 0.4%.
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, who reiterated his upbeat outlook for the economy
(https://www.wsj.com/articles/federal-reserve-should-press-ahead-with-gradual-rate-rises-feds-evans-says-1538562604)
and said the Fed would likely need to set monetary policy that
prevent the economy from overheating.
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, private-sector employment soared in
September
(http://www.marketwatch.com/story/us-adds-230000-private-sector-jobs-in-september-adp-2018-10-03),
as employers added 230,000 jobs, more than had been expected,
according to Automatic Data Processing Inc. 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.
Shares of J.C. Penney Co. Inc. (JCP) rose 11% in premarket
trading a day after it said its board of directors has appointed
retail veteran Jill Soltau as chief executive officer and a board
member
(http://www.marketwatch.com/story/jc-penney-names-former-joann-stores-ceo-its-top-executive-2018-10-02),
effective Oct. 15.
Tempur Sealy International Inc. (TPX) shares jumped 8% before
the bell, following a report
(http://www.marketwatch.com/story/tempur-sealys-stock-soars-after-report-mattress-firm-bankruptcy-was-imminent-2018-10-03)
that rival mattress retailer Mattress Firm Inc. is close to filing
for bankruptcy.
RPM International Inc.(RPM) reported adjusted first-quarter
earnings that missed expectations
(http://www.marketwatch.com/story/rpm-profit-falls-40-to-miss-estimates-2018-10-03),
but revenue that was ahead of forecasts.
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 08:31 ET (12:31 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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