BS: U.S. Stock Futures Little Changed Near Records; Oil Falls
U.S. stock futures were little changed after benchmark indexes closed at records, while oil fell and the dollar weakened from a more than five-year high. European equities slipped following a six-day rally.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent at 8:30 a.m. in New York. Contracts on the Dow Jones Industrial Average (INDU) were little changed after the gauge topped 18,000 for the first time. The Stoxx Europe 600 Index closed lower by 0.1 percent in a holiday-shortened session. West Texas Intermediate fell 1.9 percent, paring yesterday’s 3 percent gain, as the Bloomberg Dollar Spot index declined for the first time in six days, dropping 0.2 percent. The ruble weakened after a three-day advance. Copper dropped 0.3 percent.
U.S. indexes rose for a fifth day yesterday after a report showed the U.S. economy grew an annualized 5 percent. Stocks took off last week after the Federal Reserve pledged patience over interest-rate increases. Data today showed fewer Americans than forecast filed applications for unemployment benefits last week, a sign the U.S. job market is making progress.
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“We’re still in the same game of global easing, very low interest rates and disinflation in parts,” said Veronika Pechlaner, who helps oversee $2.3 billion at Ashburton Ltd. in Jersey, the Channel Islands. “Valuations have gone from very attractive to more average levels, but they’re not that extended. I wouldn’t be too negative on equities.”
U.S. equity markets will close at 1 p.m. for Christmas Eve, while financial markets in the U.S., Europe and most of Asia will be closed tomorrow for Christmas Day. Japan and mainland China will be open.
Growth Rate
The U.S. annualized growth rate was revised up from a previous estimate of 3.9 percent, and was the biggest advance since the third quarter of 2003. Separate data showed consumer spending rose more than previously estimated in the quarter, while orders for U.S. durable goods and purchases of new homes unexpectedly declined last month.
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Today’s data indicated jobless claims dropped by 9,000 to 280,000 in the week ended Dec. 20, the fewest since early November, from 289,000 in the prior period.
Oil is heading for the biggest annual decline since 2008 amid a global glut exacerbated by the highest U.S. output in more than three decades and a decision by OPEC to resist supply cuts. U.S. crude stockpiles probably shrank by 2.5 million barrels last week, a Bloomberg News survey shows before a report from the Energy Information Administration today.
WTI crude fell 2.1 percent to $55.91 a barrel, paring a 3.4 percent advance yesterday. Brent oil lost 2.4 percent to $60.22 a barrel in London.
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The greenback fell from the strongest level in two years versus the euro. It has advanced at least 4 percent against all its 16 major counterparts this year.
Yen, Yields
The yen strengthened 0.2 percent to 120.42 per dollar after declining 3.5 percent in the previous five days. The dollar fell 0.4 percent to $1.2217 per euro after appreciating to $1.2165 yesterday, the strongest level since August 2012. The euro was little changed at 146.87 yen.
The yield on U.S. 10-year Treasuries rose two basis points to 2.28 percent. It jumped 10 basis points yesterday, the most on a closing basis since November 2013. The rate on similar-maturity U.K. gilts rose for a second day, adding three basis points to 1.83 percent.
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The Treasury market will close Dec. 25 in observance of the Christmas holiday, according to the Securities Industry and Financial Markets Association’s website. The group recommended an early close at 2 p.m. New York time today. Euro-area government bond markets were shut today and re-open Dec. 29.
Europe Rally
Europe’s Stoxx 600 gauge rallied 6.4 percent in the previous six days, its biggest jump since December 2011. It has recovered about two-thirds of the losses posted earlier this month and closed 2 percent below its almost seven-year high reached Dec. 5.
Smith & Nephew Plc jumped as much as 8.5 percent as people familiar with the matter said Stryker Corp. is planning a takeover offer for the U.K. medical-device maker, a bid that could come within weeks.
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Developing-country stocks were little changed, with the MSCI Emerging Markets Index lower by 5.4 percent this quarter.
Russia’s Micex Index gained O.8 percent after Standard and Poor’s said it’s considering cutting the nation’s credit rating to junk for the first time in a decade. The equities gauge is down 6.4 percent in 2014.
The Shanghai Composite Index fell 2 percent after plunging 3 percent yesterday, as some brokerages in China raised the threshold for margin trading and short selling to control risks, the 21st Century Business Herald reported. Citic Securities Co. and Haitong Securities Co. both slumped 9 percent as data showed new stock-trading accounts dropped 29 percent last week.
Dubai’s benchmark DFM General Index climbed 2.5 percent, trimming the loss this quarter to 24 percent, while equities in Saudi Arabia gained 1.7 percent.
Copper declined for a third day and was at $6,311 a metric ton on the London Metal Exchange.
Wheat for March rose for a second day, advancing as much as 0.7 percent to $6.3975 a bushel on the Chicago Board of Trade. Russia, the world’s fourth-biggest exporter, said Dec. 22 it plans to introduce grain export duties.
s
To contact the reporters on this story: Michael Shanahan in London at mshanahan3@bloomberg.net; Jeremy Herron in New York at jherron8@bloomberg.net
To contact the editors responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net; Jeff Sutherland at jsutherlan13@bloomberg.net Jeremy Herron, Michael Shanahan
