U.S. index futures fell, signaling the rout that dragged the Standard & Poor’s 500 Index to its lowest level since 2014 isn’t over yet.
S&P 500 contracts expiring in March lost 0.4 percent to 1,848 at 6:00 a.m. in New York. The benchmark yesterday slumped 1.2 percent, even as a late-day rally helped trim declines. Contracts on the Dow Jones Industrial Average slid 71 points, or 0.5 percent, to 15,644.
Global equities’ downward spiral at the start of the year got even worse as oil continued a plunge and a slowdown in China weighed on sentiment, wiping about $ 2.2 trillion off the value of U.S. stocks. Investors from Japan to Germany and Brazil have watched their stock markets tumble into bear territory. The S&P 500 has fallen 9 percent year-to-date, triggering a technical signal that indicates it’s oversold.
Investors are keeping close watch on progress in the economy to gauge the trajectory of U.S. interest rates before the Federal Reserve’s meeting next week. Data at 8.30 a.m. New York time will show initial jobless claims declined in the week ended January 16.
Expectations for a rate hike at the Fed’s January meeting have been low since December’s increase. Now, those for March are falling too, with traders slashing the chances to 24 percent from even odds at the end of last year.
Corporate earnings may also offer cues on the strength of the U.S. recovery, with the few companies that have reported so far mostly exceeding estimates. Verizon Communications Inc., General Electric Co. and Starbucks Corp. are among S&P companies scheduled to release financial results this week. Analysts predict profits slumped 7 percent in the final three months of 2015, while sales fell 3.1 percent.
Oil companies fell in early New York trading, with Exxon Mobil Corp. declining 1.1 percent. TreeHouse Foods Inc. lost 1.4 percent after selling almost 12 million shares below Wednesday’s closing level.
Oracle Corp. jumped 9 percent after Goldman Sachs Group Inc. said current trends around its cloud business are on track. Adobe Systems Inc. gained 4 percent.
Source : Bloomberg