RTRS: US STOCKS-Futures edge lower after sharp climb last week
U.S. stock index futures pointed to a slightly lower open on Monday as investors took profits on strong gains racked up last week, offsetting bets that U.S. President-elect Barack Obama's plan for a massive tax cut will help revive the sluggish economy.
Stocks closed out a holiday-shortened week with a more than 6 percent gain as investors bet a recovery is on the horizon after closing out the worst year since the Great Depression.
"Part of what we are seeing in early trade is searching around for rationalization and not finding one necessarily and seeing a bit of a sell-off," said Arthur Hogan, chief market analyst with Jefferies & Co in Boston.
Hogan said that given that last week's gains came amid low volume, they may be difficult to sustain.
Obama, seeking to drum up support from both political parties, plans to propose up to $310 billion in tax cuts for businesses and the middle class as part of his massive economic stimulus package, senior Democratic aides said on Sunday. For details see [ID:nN04350872].
S&P 500 futures SPc1 fell 2.50 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 slipped 8 points while Nasdaq 100 NDc1 futures rose 3 points.
On Friday, the S&P closed 45 points above its 50-day moving average, the greatest margin it has been over that widely watched measure since May 20, 2008 and the third day in a row it closed above the 50-day moving average in its longest streak since early September, before Lehman Brothers' collapse.
On the data front, investors braced for U.S. monthly vehicle sales, as well as U.S. monthly construction spending data, seeking insight on the outlook for the embattled economy, but the week's big piece of macroeconomic data -- December U.S. nonfarm payrolls -- will come on Friday.
Among the few pieces of significant company news, Pfizer Inc (PFE.N), the world's biggest pharmaceutical group, is open to acquisitions, its chief executive Jeff Kindler told the Financial Times in an interview.
In other events, officials from the Federal Reserve and the European Central Bank on Sunday vowed to fight the damaging effects of deflation as the global economy suffers a deep and lengthy recession.
Over the weekend, both Janet Yellen, president of the San Francisco Federal Reserve Bank, and Lucas Papademos, vice president of the European Central Bank, highlighted the risks of deflation -- an economically damaging spiral of falling prices and demand. [ID:nN04296451] (Editing by James Dalgleish)
