By Ellie Ismailidou and Sara Sjolin, MarketWatch
Stock market tests resistance after a 'powerful run,'
strategists say
Wall Street was poised for losses on Tuesday, but stock futures
were off early lows as oil prices turned positive.
Dow Jones Industrial Average futures fell 72 points, or 0.4%, to
16,976, while those for the S&P 500 index lost 10 points, or
0.5%, to 1,989. Futures for the Nasdaq 100 index gave up 25 points,
or 0.6%, to 4,275.
Crude-oil prices turned positive as the U.S. market neared,
reversing a 0.5% drop. The commodity closed at the highest level of
the year on Monday
(http://www.marketwatch.com/story/crude-prices-add-to-gains-in-an-increasingly-bullish-market-2016-03-07)
on hopes that major producers will curtail supply and as stronger
economic data boosted expectations of improving demand.
The early move seemed to be a break with the stock market's
recent strong correlation with oil prices.
That could be an indication of technical resistance after a
recent "very powerful run" over the past couple of weeks that has
sent stocks up 10% since mid-February, said Phil Orlando, equity
market strategist at Federated investors.
"Some consolidation is warranted," Orlando added.
U.S. stocks closed higher on Monday, in part thanks to the jump
in oil prices. The S&P 500 index and Dow average extended their
winning streak to five straight sessions
(http://www.marketwatch.com/story/us-stocks-set-to-take-a-breather-after-three-week-rally-2016-03-07).
China blues: Early pressure on U.S. stock futures came after
Chinese trade data showed exports tumbled for an eighth straight
month
(http://www.marketwatch.com/story/chinas-exports-tumble-for-8th-month-in-a-row-2016-03-07),
in another sign a slowing global economy is undercutting growth in
the world's second largest economy.
"Will China again be the factor that breaks the bulls? Overnight
the trade data from the world's second-largest economy was truly
awful," said Richard Perry, analyst at Hantec Markets, in a
note.
Data showed exports fell 25.4% in February, compared with the
15% expected, while imports were down 13.8%. Perry noted that
though double-digit declines were expected for both imports and
exports, those drops drive real concerns about the pace of China's
economic slowdown.
"Not only does this reflect badly on the emerging markets that
supply China, but also the state of global demand," he said.
Read: Why 2016's gold rush is already running out of steam
(http://www.marketwatch.com/story/why-2016s-gold-rush-is-already-running-out-of-steam-2016-03-07)
Movers and shakers: Shares of SunEdison Inc. (SUNE) jumped 25%
after Vivint Solar (VSLR) said it has terminated its merger
agreement with SunEdison
(http://www.marketwatch.com/story/vivint-terminates-sunedison-takeover-deal-2016-03-08-7103646)after
mounting financial woes kept the solar-energy company from meeting
obligations of the deal.
JetBlue Airways Corporation (JBLU) lost 5.4% after the airliner
projected a first-quarter unit revenue decline
(http://www.marketwatch.com/story/jetblue-gives-downbeat-outlook-as-february-unit-revenue-falls-2016-03-08).
(http://www.marketwatch.com/story/jetblue-gives-downbeat-outlook-as-february-unit-revenue-falls-2016-03-08)Dicks
Sporting Goods Inc. (DKS) were down 3.6% after the retailer missed
profit expectations for the fourth quarter
(http://www.marketwatch.com/story/dicks-sporting-goods-shares-take-a-hit-after-missing-profit-expectations-2016-03-08).
Shares of Seadrill Ltd. (SDRL.OS) skidded 6% premarket, falling
after a recent rally. The offshore driller surged 121% in U.S.
trade on Friday after what analysts called a major short squeeze
(http://www.investopedia.com/terms/s/shortsqueeze.asp).
The Norwegian company's chief executive told Reuters
(http://uk.reuters.com/article/seadrill-refinancing-idUKL5N16F1EQ)
he expects refinancing from banks to come through during the second
quarter, and said that short sellers are "beginning to panic" at
the prospect.
Shares of Apple Inc. (AAPL) down 0.9% premarket, after the
Supreme Court declined Apple's request for a review of an e-books
(http://www.marketwatch.com/story/supreme-court-turns-away-apple-appeal-in-e-books-antitrust-case-2016-03-07)
antitrust case, leaving the iPad maker facing a payment of $400
million to e-book consumers.
Shares of Shake Shack Inc. (SHAK) dived 9.3% ahead of the bell
after the burger chain late Monday posted a lackluster sales
forecast
(http://www.marketwatch.com/story/shake-shack-posts-lackluster-sales-forecast-2016-03-07).
Urban Outfitters Inc. (URBN) soared 9% in premarket after
posting a profit fall that beat forecasts late Monday. Dick's
Sporting Goods Inc. (DKS) fell over 6% in premarket after earnings
and sales disappointed Wall Street expectations. .
Data: The day's only major economic release is already out. The
NFIB small business index for February fell 1 point
(http://www.nfib.com/surveys/small-business-economic-trends/) to
92.9, with none of the 10 components posting a gain.
"Overall, a 'ho hum' outcome, confirming that the small business
sector is not headed up with any strength, just treading water
waiting for a good reason to invest in the future," the NFIB said
in the release.
There are no Federal Reserve speakers on tap, as the central
bank is in its so-called blackout period ahead of next week's
policy-setting meeting.
Other markets: Asian markets ended mixed after the lackluster
Chinese trade data, although the Shanghai Composite Index eked out
a gain to close higher for a sixth straight session
(http://www.marketwatch.com/story/china-stocks-plunge-dragging-down-asian-markets-2016-03-07).
European stock markets were lower
(http://www.marketwatch.com/story/european-stocks-fall-after-surprise-plunge-in-chinese-exports-2016-03-08)
almost across the board, with commodity firms bearing the brunt of
the selloff.
Metals traded mixed, while the dollar was slightly higher
against most other major currencies.
(END) Dow Jones Newswires
March 08, 2016 09:25 ET (14:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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