U.S. Stocks Poised to Fall Again
04 Mai 2016 - 3:14PM
Dow Jones News
By Riva Gold
U.S. stocks were poised to fall further Wednesday, a day after
the Dow Jones Industrial Average ended at a three-week low.
Futures pointed to a 0.6% opening loss for the S&P 500.
Changes in futures don't necessarily reflect market moves after the
opening bell.
Ahead of Friday's closely watched nonfarm payrolls figures, ADP
reported the U.S. labor market added 156,000 new jobs in the
private sector, marking a slowdown.
The trade deficit, meanwhile, narrowed in March as imports fell
faster than exports, underscoring slow growth at home and abroad in
the opening months of the year.
Shares of resource companies led declines in Europe and
Australia as metals prices retreated. The Stoxx Europe 600 was down
0.9% halfway through the session, while London's FTSE 100 fell to
its lowest level in over three weeks.
Shares in BHP Billiton fell around 7% after Brazilian federal
prosecutors filed a lawsuit against the Anglo-Australian miner as
well as Vale SA and Samarco Mineração over a dam failure in
November. Metals prices also edged lower, weighing on the sector,
as the dollar continued to rebound from multimonth lows.
The euro was down 0.2% against the dollar at $1.1479, while the
dollar was up 0.1% against the yen at Yen106.8340. The British
pound fell 0.5% against the dollar to $1.4469.
"The level of the dollar will be critical to how well the market
performs," said Patrick Spencer, vice chairman of equities at
Robert W. Baird & Co. While he expects it to remain near its
current levels, any meaningful recovery of the dollar would hurt
stocks around the world, he added.
A stronger dollar weighed on U.S. company profits in the first
quarter of the year, and could hinder a recent rally in
commodities, analysts say.
Investors had ramped up bets against the dollar in recent weeks,
after the U.S. economy grew slower than expected in the first
quarter and the Fed signaled it would raise interest rates at a
gradual pace.
But that trend began to reverse Tuesday after comments from
Federal Reserve Bank of Atlanta leader Dennis Lockhart and Federal
Reserve Bank of San Francisco President John Williams heightened
concerns about a rate rise this year.
Earlier, shares in Asia mostly ended lower, weighed by losses on
Wall Street and recent declines in the oil price. Australia's
S&P ASX 200 fell into negative territory for the year, while
shares in Hong Kong ended down 1%. Shares in Shanghai were little
changed, while markets in Japan were closed for a holiday.
Wall Street closed lower Tuesday for the third time in four
sessions, underlying investors' concerns about the sustainability
of a recovery in stocks that started in February.
"After a relief rally supported by really reflationary central
bank policy, gravity is taking us back down to earnings, which are
hardly robust," said Tina Byles Williams, chief investment officer
at FIS Group. Companies are beating lower expectations, but
comparisons with prior periods aren't encouraging, she added.
In Europe, shares in Royal Dutch Shell PLC, Air France-KLM, and
Anheuser-Busch InBev NV all fell after the companies reported
downbeat first-quarter earnings, while France's Société Générale SA
reported an increase in first-quarter net profit, sending shares of
the lender up 3.7%.
In economic news, eurozone retail sales fell in March for the
first time in five months, data showed Wednesday, while the
region's composite purchasing managers index was largely
unchanged.
In commodities, Brent crude oil was up 0.1% at $45.01 a barrel,
after falling over 6.5% this week. Key supply data from the U.S.
Department of Energy is due later Wednesday.
Copper prices in London fell 0.4% to $4,888 a ton, while gold
was down 0.6% at $1284.20 an ounce.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
May 04, 2016 08:59 ET (12:59 GMT)
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