MW: U.S. stock futures slip as market digests Fed move
U.S. stock futures edged lower Thursday, with traders taking some gains off the table following the decision by the Federal Reserve to boost its balance sheet.
S&P 500 futures slipped 3.5 points to 788.10 and Nasdaq 100 futures dropped 7.25 points to 1,205.50. Dow industrial futures slipped 30 points.
U.S. stocks rose, and government bonds surged, on Wednesday after the Federal Reserve's move to buy long-term Treasury bonds.
The Fed said it will buy up to $300 billion in longer-term Treasurys and raise the size of lending programs already aimed at reducing mortgage rates by another $750 billion. The commitment to buy Treasury securities and additional mortgage-related debt should mean lower rates for a variety of business and consumer loans.
The Dow Jones Industrial Average rose 90 points, the S&P 500 added 16 points and the Nasdaq Composite rose 29 points.
Some of those gains unwound on Thursday. Yields on 30-year Treasury bonds rose 4 basis points. Yields move in the opposite direction to prices.
"On the one side, this is clearly positive news as the measures will help stabilizing the housing market and therefore will have a positive impact especially for banks," said credit analysts from Germany's Landesbank Baden-Wurttemberg.
"However, on the other side, the question is at what price? Bottom line is the Fed is adding a trillion dollars to their balance sheet. In the long run, the price for these massive rescue measures might be inflation as once the economy recovers the Fed might be not able to raise interest rates quickly enough."
Gold futures rallied, up over $40 to $929.70 an ounce. Oil futures were trading above $49 a barrel, and the dollar fell vs. the Japanese yen.
Thursday's calendar includes weekly jobless claims, the Philly Fed manufacturing survey for March and the leading economic indicators for February.
On the corporate side, FedEx results will be in the spotlight, with the Memphis delivery firm considered a bellwether of sorts for the global economy.
Nike may see pressure, as it did in after-hours trade on Wednesday, as investors looked past the stronger-than-forecast earnings and to the sneaker maker's declining order book.
Oracle may advance after recording a 1% profit fall and announcing its first-ever dividend.
"This better-than-expected set of numbers and guidance, plus a first ever dividend, could spur a relief rally for the shares down 8% over the last month," said analysts from Societe Generale.
Oracle rival SAP rose 2.9% in German trade.
The two insurers named Prudential could see diverging performances on Thursday. Prudential Financial had its credit rating downgraded by Moody's Investors Service. But Prudential plc rose in London trade after recording a stronger-than-forecast operating profit and announcing that its chief executive, Mark Tucker, will leave in September.
In Europe, insurers paced an advance as investors on the Continent had their first opportunity to react to the Fed news.
Asian markets were mixed, with the Nikkei 225 down 0.3% in Tokyo while the Australian S&P/ASX 200 rose 1%.
