BLBG: U.S. Index Futures Rebound After Stock Gains Vanish on Tuesday
U.S. index futures are pointing to a higher open for the Standard & Poor’s 500 Index after its worst six days in four years.
S&P 500 E-mini contracts expiring in September climbed 1.6 percent to 1,903.5 at 11:50 a.m. in London and gained as much as 1.9 percent. Futures on the Dow Jones Industrial Average added 242 points, or 1.5 percent, while those on the Nasdaq 100 Index rose 1.6 percent.
Yet after yesterday’s reversal, traders remain cautious.
Futures being up is “a positive sign but it doesn’t mean as much as it normally would,” said Jasper Lawler, London-based market analyst at CMC Markets Plc. “Given the volatility, you cannot expect the way we open the market is the way we’ll close the market. Yesterday just goes to show that.”
A rebound that took the Dow up more than 440 points on Tuesday disappeared in the final hour of trading, with investors giving in to trepidation over what will happen overnight in China. The S&P 500 went from up 2.9 percent to down 1.4 percent.
More than $2 trillion has been erased from American equity values since the S&P 500 started its losing streak, breaking a calm in a stock market that had gone almost four years without a 10 percent correction. The measure has plunged 11 percent in six days, the most since the U.S. was stripped of its AAA credit rating by S&P in August 2011.
S&P 500 futures earlier pared gains as the Shanghai Composite Index closed down 1.3 percent, erasing and advance of as much as 4.3 percent. That coincided with the market open in Europe, where the benchmark gauge is trading 1.2 percent lower and fell as much as 2.7 percent.
“China continues to be key,” Komal Sri-Kumar, the Santa Monica, California-based founder and president of Sri-Kumar Global Strategies Inc., told Bloomberg TV. “The authorities have not been intervening, they’ve been allowing stocks to go down in price.”
1% Away
The benchmark gauge for U.S. equities is 1 percent away from erasing its gains since the end of 2013 and about 5 points above the lowest level of its last big tumble, on Oct. 15. A measure of market turbulence known as the VIX is near its highest level since October 2011 after it posted a record six-day jump.
Cameron jumped 44 percent in early New York trading as Schlumberger Ltd. agreed to buy it. Google Inc. rose 3.4 percent after Goldman Sachs Group Inc. recommended buying the shares.
