Ideas that the Federal Reserve could raise interest rates next year sent U.S. stock index futures lower Monday ahead of a speech from the Fed's chairman.
S&P 500 futures fell 4.3 points to 1,103.80 and Nasdaq 100 futures dropped 7.25 points to 1,787.75. Futures on the Dow Jones Industrial Average fell 38 points.
U.S. stocks closed higher Friday after news that just 11,000 nonfarm payroll jobs were lost in November--the smallest rate of job destruction in nearly two years. The Dow Jones Industrial Average rose 22 points, the Nasdaq Composite added 21 points and the S&P 500 climbed 6 points.
Gains were tempered by the dollar's rally on growing expectations of rate hikes from the U.S. Federal Reserve, which at the moment has interest rates at near-zero levels.
"The very strong inverse relationship over the past 18 months between the dollar and risk assets will be the most interesting thing to watch in 2010 if the greenback finally bottoms," said Jim Reid, a strategist at Deutsche Bank. "It's still a big 'if' but Friday was fascinating in that the market ended higher after the dollar rally but only via some extreme intra-day moves across different assets."
Federal Reserve Chairman Ben Bernanke will have a chance to address that issue in a speech due for delivery at noon Eastern.
Ahead of Bernanke, the dollar rose against the euro but fell vs. the Japanese yen, which some analysts say is the currency that may become the target of the new carry trade. A carry trade is when traders borrow in a low-yielding currency to reinvest elsewhere.
Gold futures continued their slide, losing $28 an ounce. Oil futures also dropped and traded below the $75 a barrel level.
Citi (C) will be in the spotlight as Kuwait sold a $4.1 billion stake in the New York lender, while the Financial Times reported that Citi is hoping to convince U.S. authorities to allow it to repay $20 billion of bailout funds.
Akamai Technologies (AKAM) on Monday lifted its fourth-quarter revenue and earnings guidance, saying trading in the first two months of the quarter have exceeded its expectations. The Internet services company lifted its guidance for fourth-quarter adjusted earnings to a range of 42 cents to 43 cents a share, from a range of 39 cents to 41 cents a share.
Analysts had been expecting adjusted earnings of 40 cents a share on revenue of $221.9 million
Bank pay also will be in the spotlight as Britain is reportedly weighing new measures to tax bonuses, while five senior executives told American International Group (AIG) that they'll quit if compensation was cut significantly by a U.S. pay czar, The Wall Street Journal reported.
In Asia, resource stocks struggled but the Nikkei 225 advanced 1.5% in Tokyo after the biggest weekly drop in the yen in ten years.
The pan-European Dow Jones Stoxx 600 fell 0.7%.
By W. Watts, AskNewswires@dowjones.com
1 comment:
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