U.S. Stock Futures Pull Back After S&P 500 Record
By Will Horner
U.S. stock futures edged lower Wednesday, suggesting that major
indexes will take a breather after climbing to record highs.
Futures tied to the S&P 500 ticked down 0.3%, a day after
the benchmark set its 27th closing record of the year. Contracts
linked to the technology-heavy Nasdaq-100 index slid 0.4%, while
Dow Jones Industrial Average futures also retreated 0.4%.
The market has been propelled higher in recent weeks by optimism
that Covid-19 vaccines will help accelerate the economic rebound.
That has led to a jump 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.
Stocks are likely to continue rallying in coming weeks, despite
valuations that appear to be stretched, he added. "Why would you be
a seller of stocks when you know that policy support, both fiscal
and monetary, is there and probably will be there going
Ahead of the opening bell in New York, Pfizer rose 3% after the
U.K. government approved its Covid-19 vaccine for use, paving the
way for the shot to be distributed within days. Shares in Pfizer's
partner, BioNTech, rose over 4% in Germany.
Salesforce.com fell more than 6% in premarket trading. The
cloud-computing company on Tuesday confirmed that it had agreed to
buy Slack Technologies for $27.7 billion.
U.S. lawmakers this week reignited talks 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 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
The ADP National Employment Report on Wednesday showed that job
creation in the private sector slowed last month. About 307,000 new
nonfarm jobs were created, marking a drop from October and less
than economists had been forecasting.
Federal Reserve Chairman Jerome Powell and Mr. Mnuchin are set
to testify 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 ticked up to
0.938%, from 0.933% on Tuesday.
Overseas, the Stoxx Europe 600 edged down 0.5%. 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 dropped 1% 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 09:24 ET (14:24 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.