Tuesday, 9 August 2016

Futures flat a day after S&P touches record high

U.S. stock index futures were little changed on Tuesday as investors looked for market-moving catalysts, a day after the S&P 500 index touched a record intraday high.

On Monday, Wall Street closed down in one of its lowest volume trading day this year, after the S&P slipped from its record high as healthcare stocks weighed.

Investors will continue to assess the rest of second-quarter earnings and economic data to justify valuations.

While earnings of S&P 500 companies are expected to decline at a slower rate than anticipated at the start of the season, investors worry that the earnings recession may spill into the third quarter.

Analysts polled by Reuters expect third-quarter earnings for S&P 500 components to fall 0.2 percent, as of Monday. They had estimated a 0.2 percent rise on Aug. 3, according to Thomson Reuters data.

However, a forecast-beating payrolls report on Friday has helped bring back some of the risk-on mode in the markets. Safe havens gold and the Japanese yen were lower on Tuesday.

Oil prices were largely flat after rising 2.5 percent on Monday on renewed hopes that OPEC members would work out a plan to freeze output.

Investors will also keep an eye on economic data including a Labor Department report at 8:30 a.m. ET (1230 GMT), which is likely to show productivity rose 0.4 percent in the second quarter after declining 0.6 percent in the preceding quarter.

If the trend of robust economic data continues, it could encourage the Federal Reserve to raise interest rates sometime this year.

Valeant  rose 7.3 percent to $24.12 premarket after the company maintained its full-year forecast and announced strategic changes to its business.

SolarCity, the target of an acquisition by Tesla, was down 3.4 percent at $23.50. The company is scheduled to report results after markets close.

No Fed official is scheduled to speak this week.

Reference: Yashaswini Swamynathan

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