Stock Futures Pull Back After S&P 500 Hits Record
By Will Horner
U.S. stock futures edged lower Wednesday, suggesting that the
major indexes will take a breather after climbing to record
Futures tied to the S&P 500 ticked down 0.1%, a day after
the benchmark set its 27th closing record of the year. Contracts
linked to the technology-heavy Nasdaq-100 index are almost flat,
while Dow Jones Industrial Average futures slid 0.3%.
The market has been fueled higher in recent weeks by optimism
that Covid-19 vaccines will help accelerate the economic rebound.
That has fueled a rally in stocks that are sensitive to economic
growth, including energy and banks.
"We've obviously had a great run up since just before the
election results and yesterday we saw that record high, so that is
as much a reason as any for some consolidation," said Derek
Halpenny, head of research for global markets in the European
region at MUFG Bank.
U.S. lawmakers reignited talks this week for coronavirus-relief
packages, with House Speaker Nancy Pelosi and Treasury Secretary
Steven Mnuchin discussing measures by phone for the first time
since the election. But investors also remain skeptical about the
prospects for fresh stimulus spending in the weeks before
President-elect Joe Biden is sworn in.
"Both sides would like to be seen to be doing something with an
eye on the run off in Georgia on the fifth of January," Mr.
Halpenny said. But Republicans are unlikely to support a large
spending package, he added. "I can't see anything happening really
until Biden enters the White House."
The Federal Reserve's beige book report, due at 2 p.m. ET, will
offer the latest collection of business anecdotes across Fed
districts, offering insights into how companies view the economy's
Investors will also get a view on the health of the U.S. labor
market last month from the ADP National Employment Report, due at
8:15 a.m. ET. The data will show how many jobs were added by
private employers in the U.S. nonfarm sector.
Federal Reserve Chairman Jerome Powell and Mr. Mnuchin are also
set to testify again before a house committee. Lawmakers on Tuesday
pressed Mr. Mnuchin over his decision not to renew a suite of
emergency Federal Reserve lending programs. The Fed has said it
would prefer the lending programs remain in place until the risks
posed to the economy by the pandemic has subsided.
In bond markets, the yield on the 10-year Treasurys slid to
0.924%, from 0.933% on Tuesday.
Overseas, the Stoxx Europe 600 edged down 0.2%. Conflicting
reports about the status of the talks between the European Union
and the U.K. on a post-Brexit trade deal led to choppy trading in
The British pound slid 0.5% against the dollar. A media report
that a senior EU diplomat is cautioning both sides run the risk of
a no-deal Brexit weighed on sentiment early Tuesday, according to
James McCormick, global head of desk strategy at Natwest
"We are in this moment where negotiations have gone into the
tunnel," Mr. McCormick said. "While it is hard to judge where talks
are, the early indications are that a no-deal is still a
non-negligible risk," he said.
In Asia, the major stock indexes ended trading on a muted note.
Japan's Nikkei 225 closed almost flat, while the Shanghai Composite
Index and Hong Kong's Hang Seng Index slid roughly 0.1%.
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
December 02, 2020 05:45 ET (10:45 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.