MW: Dow hovers near record high, but dollar strength could stand in the way
U.S. stock futures struggled for direction on Friday, which could cloud chances for the Dow industrials’ to mark a new closing high, though a surging dollar was prompting worries about exporters.
The fresh strength in the dollar comes after Federal Reserve Chairwoman Janet Yellen signaled Thursday that a December interest-rate hike was likely to go ahead.
Futures pared losses from earlier. Dow Jones Industrial Average futures ESZ6, +0.11% inched up 4 points to 18,844, while S&P 500 futures ESZ6, +0.11% flat at 2,184.25. Nasdaq-100 futures ESZ6, +0.11% rose 4.5 points to 4,833.24.
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Wall Street finished a wobbly session slightly higher after Yellen’s remarks on Thursday. The Dow DJIA, +0.19% ended up 0.2% at 18,903.82, just 20 points short of the all-time closing high, set Tuesday.
Need to know: The S&P 500 is also getting ever-so-close to a record
On Friday, the ICE Dollar Index DXY, -0.01% , which measures the currency against a basket of six rivals, shot above 100 to a fresh 13-year high . The greenback was trading at levels not seen in months against the Japanese yen USDJPY, -0.09% .
“In a high-growth environment, it is likely we will see investors moving into the U.S. as a source of capital appreciation,” said Joshua Mahony, market analyst at IG, in a note to clients.
“However, the hesitancy seen in U.S. stock markets is a clear nod to the fact that with such dollar appreciation comes an environment which is progressively more difficult for U.S. exporters,” he added.
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Yellen: Rate increase likely despite election turmoil(4:13)
Federal Reserve Chairwoman Janet Yellen said she intends to serve her full term as chair through 2018 and that the central bank is on track to raise interest rates despite postelection uncertainties.
In a continuation of Thursday’s action, the yield on the 10-year Treasury note TMUBMUSD10Y, -0.92% rose 1 basis point to 2.31%.
Fed speakers ahead: Investors might look for guidance from more policy makers on Friday. St. Louis Fed President James Bullard said at a conference in Frankfurt that he’s leaning towards the likelihood of an interest-rate hike in December, according to a report from CNBC.
Dallas Fed President Rob Kaplan will speak at 1:30 p.m. Eastern Time in Houston, while Kansas City Fed President Esther George is set to talk at the Dallas Fed at 9:30 p.m. Eastern.
Also on the docket is Fed governor Jerome Powell, who is scheduled to appear at the San Francisco Fed at 9:45 p.m. Eastern.
The only major data release of note on Friday is a report on leading indicators, due at 10 a.m. Eastern.
Stocks to watch: Abercrombie & Fitch Co. ANF, -11.70% shares slid 10% in premarket as profit dived and the company announced a re-branding. Foot Locker Inc. FL, -2.24% also fell after it announced results.
Salesforce.com Inc. CRM, +7.06% rose 8% in premarket after the cloud-computing company posted rising revenue and boosted its outlook. But shares of Applied Materials Inc. AMAT, -2.34% fell in after-hours trading after the chip-equipment maker missed expectations for new orders.
Read: Salesforce sets finish line in race to $10 billion
Gap Inc. GPS, -6.81% slid 6% in premarket after the retailer posted a weak outlook. late Thursday.
Other markets: European stocks SXXP, -0.15% pulled back slightly on Friday, led by banking and commodity names. European Central Bank President Mario Draghi signaled Friday that the central bank’s stimulus will be extended for the region, whose economy remains clouded by risks.
Asian markets ADOW, -0.30% had a mixed day, though yen weakness gave a boost to the Nikkei 225 index NIK, +0.59% , which rose 0.6%.
The dollar’s move higher took a toll on gold GCZ6, -0.47% , which dropped $11.80, or 1%, to $1,205.30 an ounce. Oil CLZ6, +0.59% slipped 11 cents to $45.28 a barrel.
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Joseph Teri 1 hour ago
Suck it up, exporters.
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