By Barbara Kollmeyer and Al Lewis, MarketWatch
MADRID (MarketWatch) -- A day after heavy losses for Wall
Street, stock futures indicated sellers may still be in control
Thursday, as investors flocked to commodities and the yen, with
Middle East tensions adding to jitters.
Futures for the Dow Jones Industrial Average (YMM5) slid 156
points, or 0.9%, to 17,498, while those for the S&P 500 index
(ESM5) dropped 17 points, or 0.8%, to 2,036.75. Futures for the
Nasdaq-100 index (NQM5) fell 45.25 points, or 1%, to 4,278.
Selling in tech and biotech stocks drove the carnage on Wall
Street Wednesday. The S&P 500 (SPX) and Dow industrials (DJI)
each logged the worst losses in two weeks. The Nasdaq Composite
(RIXF) finished 2.4% lower, and the iShares Nasdaq Biotechnology
ETF (IBB) slid 4.1%.
Rather than Michael O'Rourke, chief market strategist at
JonesTrading, believes what's happening is the market is starting
to view previous tailwinds as headwinds.
"When one considers the trends behind the major top-down
elements that investors watch -- 1. fundamentals in the form of
earnings, 2. policy in the form of the Fed, and 3. economic data --
all three were previous tailwinds that appear to be transforming to
headwinds as of late," O'Rourke said in a note.
Others blamed the selloff on a number of factors: earnings
jitters, investors cashing in on recent run-ups for biotechs and
other stocks, and a drop in durable-goods orders that triggered
U.S. growth concerns. Picking up the selling baton, the Stoxx
Europe 600 index stumbled 1.3%. The Nikkei 225 index posted the
biggest losses in two months, with a 1.4% decline.
Read: Stocks are overpriced, overleveraged, headed for trouble
(http://www.marketwatch.com/story/stocks-are-overpriced-overleveraged-headed-for-trouble-2015-03-25)
Middle East tension also added to the mix. Investors drove up
gold prices (GCJ5), which shot through the psychologically
important level of $1,200 an ounce, while oil prices (CLK5) surged
nearly 5% as reports of Saudi strikes in Yemen triggered worries
about crude supply. The yen (USDJPY), another perceived-safe-haven
asset, also surged against the dollar.
Read: Oil prices surge as Saudi strikes in Yemen trigger supply
worries
(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)
(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)
(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)
(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)The
only data on tap for Thursday is weekly jobless claims, due at 8:30
a.m. Eastern Time. Speaking in Frankfurt earlier, St. Louis Fed
President James Bullard said risks of keeping U.S. policy of rates
at zero too long could be "substantial."
"Now may be a good time to begin normalizing U.S. monetary
policy so that it is set appropriately for an improving economy
over the next two years," Bullard said in prepared remarks to the
OMFIF City Lecture in Frankfurt, The Wall Street Journal reported
(http://blogs.wsj.com/economics/2015/03/26/feds-bullard-risks-of-keeping-u-s-policy-rates-at-zero-too-long-may-be-substantial/?KEYWORDS=bullard).
Fed Vice Chair Stanley Fischer will speak in Frankfurt on the
U.S. nonbank financial sector at 6:30 a.m. Eastern. Atlanta Fed
President Dennis Lockhart, a voting member of the Fed, takes part
in an on-stage discussion in Detroit about U.S. monetary policy and
economic outlook at 9 a.m. Eastern Time.
Stocks to watch: GameStop Corp.(GME), Lululemon Athletica
Inc.(LULU), Restoration Hardware Holdings Inc.(RH) and ConAgra
Foods Inc.(CAG) will report Thursday.
Red Hat Inc.(RHT) shares could add to a late rally Wednesday on
the heels of better-than-expected results
(http://www.marketwatch.com/story/red-hat-apollo-education-pvh-earnings-in-focus-2015-03-24).
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