By Barbara Kollmeyer and Al Lewis, MarketWatch
Middle East tensions drive up oil, gold prices
MADRID (MarketWatch) -- Stock futures pointed to another rout
for Wall Street on Thursday, with tech, biotech stocks and small
companies threatening to drag the market lower for a second day as
investors fretted about U.S. economic growth and scrambled to
perceived haven of gold and the yen.
Middle East tensions. specifically airstrikes launched by Saudi
Arabia in Yemen
(http://www.marketwatch.com/story/iran-warns-saudi-airstrikes-in-yemen-will-escalate-tension-in-region-2015-03-26),
pushed up oil prices, adding to jitters.
The heaviest losses for futures fell on those for the Nasdaq-100
index (NQM5), down 45 points, or 1%, to 4,278.50. Futures for the
Dow Jones Industrial Average (YMM5) slid 119 points, or 0.7%, to
17,529, while those for the S&P 500 index (ESM5) dropped 13.55
points, or 0.7%, to 2,040.
Selling in tech and biotech stocks drove the carnage on Wall
Street Wednesday. Small-cap stocks, which had been highflyers, also
took it on the chin, with the Russell 2000 (RUT) falling 2.34%, to
close at 1,233.86 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%.
Michael O'Rourke, chief market strategist at JonesTrading,
believes what's happening is the market is reassessing data
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
concerns about U.S. economic growth.
The Stoxx Europe 600 index stumbled 1.3% ion Thursday trade. 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 pushed through the psychologically
important level of $1,200 an ounce, while oil prices (CLK5) surged
nearly 4% as news of a coordinated strikes in Yemen by five Gulf
states and Egypt 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. It's expected to show little change.
The Fed calendar is fuller. St. Louis Fed President James
Bullard, speaking in Frankfurt, 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: Shares of SanDisk Corp.(SNDK) plunged 14% in
premarket trading after the company cut its sales outlook
(http://www.marketwatch.com/story/sandisk-shares-sink-after-revenue-outlook-cut-2015-03-26).
Lululemon Athletica Inc.(LULU) fell 3% in premarket trading
after news of a disappointing outlook
(http://www.marketwatch.com/story/lululemon-gives-disappointing-outlook-shares-drop-2015-03-26).
GameStop Corp.(GME), 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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