BLBG: U.S. Index Futures Rise, Signaling S&P 500 to Rebound From Slump
(Bloomberg) -- U.S. stock-index futures rose, indicating the S&P 500 Index may rebound after a surging dollar sparked the biggest equities selloff in more than two months.
Contracts on the Standard & Poor’s 500 Index expiring in March advanced 0.3 percent to 2,048.30 at 7:45 a.m. in New York, while Dow Jones Industrial Average futures rose 39 points, or 0.2 percent, to 17,705.
“Yesterday’s fall was one of the biggest this year so seeing futures trying to stabilize is not that much of surprise,” said Stewart Richardson, chief investment officer at RMG Wealth Management LLP in London. “Prices have come down in the last few days partly due to fears over higher interest rates in the future and also a growing fear that a strengthening U.S. dollar is beginning to have an impact over U.S. earnings. The market is still fragile and vulnerable to a decline in the days ahead.”
The dollar’s ascent to a 12-year high versus the euro sent American stocks tumbling yesterday, erasing gains for the year on concern earnings are in worse shape than investors recognized. The S&P 500 is down 0.7 percent in 2015, making the index the worst-performing developed market after Greece.
Concern the Fed may start raising interest rates amid a strengthening economy has also weighed on equities this year. Other major central banks are cutting rates and buying government bonds to stimulate growth.
The S&P 500 fell 1.6 percent last week, the most since January, as data showed the jobless rate fell to within the Federal Reserve’s range for what it considers full employment. Policy makers next meet on March 17-18.
Dollar General Corp. and Oracle Corp. are among the final companies to post quarterly results over the next week as the earnings season comes to a close. Around 74 percent of companies that have already reported beat profit projections, while 56 percent topped sales estimates.
Analysts predict profit at S&P 500 companies will drop 5.1 percent in the current quarter after a 4.4 percent increase in the final three months of 2014, data compiled by Bloomberg show.
To contact the reporter on this story: Roxana Zega in Zurich at rzega@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Trista Kelley, Namitha Jagadeesh
