US futures point to lower open after volatile Tuesday session

08 Février, 2018, 20:58 | Auteur: Basile Toussaint
  • US futures point to lower open after volatile Tuesday session

At its lowest ebb, the Dow was down 1,597 points from Friday's close. The S&P 500 .SPX rose 19.7 points, or 0.73 percent, at 2,714.84 and the Nasdaq Composite .IXIC was up 26.64 points, or 0.37 percent, at 7,142.52. The Federal Reserve may face a quandary: "they seem to want to raise interest rates (to fight feared inflation) but that may spook the stock market".

On Wednesday, the U.S. Senate reached a two-year bipartisan budget deal worth around $300 billion in an attempt to end the kind of squabbling over fiscal issues that has plagued Washington for years.

What happened Monday on Wall Street was the biggest point drop ever and it ended with a 1,175 point deficit by close.

The Dow Jones industrial average closed at 24,912.77, an increase of 567 points, or 2.3 percent. The Russell 2000 index of smaller-company stocks sank 56.18 points, or 3.6 percent, for 1,491.09.

US stocks rebounded in volatile afternoon trading on Tuesday, with major indexes up more than 1 percent following the biggest one-day drops for the S&P 500 and the Dow in more than six years. (The S & P 500 is down about 7 percent from its prior record level).

It had also lost four per cent last week, marking its worst weekly decline since January 2016. I have been watching reporters covering the news and it's a bit much.

Treasury Secretary Steven Mnuchin appeared at a previously scheduled hearing on Capitol Hill, where he urged lawmakers to focus on the economy's strong fundamentals.

Technology shares fell 1.4 per cent, with Apple down 2.1 per cent, while energy dropped 1.7 per cent as oil prices slumped.

The pivotal gauge of the S&P 500 volatility, the VIX, opened at a relatively elevated 31 points and later slipped to 21.24.

Earlier European shares closed up 2.0 percent, snapping a seven-day losing streak, while a world stock index was up slightly.

" Je me coupe la main si Neymar va au Real Madrid…" — PSG
Quand les choses se compliquent, les joueurs usent et abusent des centres, une arme trop prévisible pour inquiéter les défenses. D'abord sur un contre conclu par Emmanuel Boateng (42e), puis sur un but de Giampaolo Pazzini (89e).

Investors say Monday was the first real setback in almost a year and many experts anticipated a market correction was coming.

U.S. Securities and Exchange Commission Chairman Jay Clayton said he "can't really say" what caused the dramatic drop in stock prices during recent trading sessions, but that all signs indicate financial markets are functioning normally.

Devine thinks the steepness of the crash could create a long "bear" period during which stock prices stay low and even drift down slowly.

"We've been looking at this as an opportunity to incrementally add a little bit of risk - not get over our skis, but a little bit", said Erin Browne, head of asset allocation at UBS Asset Management in New York. That was its biggest loss since August 2011, when stocks were reeling as investors were fearful about European government debt and the U.S. had its credit downgraded after the debt ceiling impasse.

The Dow dropped as much as 680 points on Thursday as investors focused on concerns about inflation and higher interest rates.

"The markets had blinders on", said Invesco Chief Global Markets Strategist Kristina Hooper.

The catalyst for the latest sell-off came in jobs figures last Friday showing that wage growth in the U.S. was creeping higher. When bond yields rise, those stocks become less appealing to investors seeking income.

The broader Standard & Poor's 500 index rose 46 points, or 1.7 percent, to 2,695.

While it's a bit out of the ordinary, the Dow's 4.6% move lower is something Wall Street has witnessed dozens of times before and will see many more times in the future.

"People were positioned for more central bank easing or continued central bank easing, low rates, and importantly, low volatility", he said.