U.S. Stock Futures Little Changed Ahead of ISM Data
…Stock futures little changed ahead of ISM data, as investors assess holiday shopping trends
…Europe markets slip as downbeat Spanish manufacturing data weigh
…Data expected to show manufacturing activity expanded at a slightly slower pace
NEW YORK -U.S. stock futures were little changed, as investors paused following the recent run to record highs while they assessed mixed readings on holiday shopping and weakness in Europe.
European markets were weighed down by downbeat manufacturing data out of Spain and machinery orders from Germany.
About 90 minutes ahead of the open, Dow Jones Industrial Average futures inched up 10 points, or 0.1%, to 16076. On Friday, the Dow slipped 11 points, or 0.1%, to snap a five-session streak of record high closes.
S&P 500 index futures inched up one point, or 0.1%, to 1805 and Nasdaq 100 futures gained seven points, or 0.2%, to 3494. Changes in stock futures don’t always accurately predict stock moves after the opening bell.
NEW YORK – The S&P 500 eased 0.1% on Friday, but still recorded an eighth-straight weekly gain, the longest such stretch since the nine-week streak ended Jan. 23, 2004.
The retailing sector remained a focus, as reports over the weekend indicated more people went shopping, but they spent less than last year.
Among some retailers seeing early activity, Amazon tacked on 0.7% in premarket trading, Wal-Mart gave up 0.1%, Target ticked up 0.2% and eBay rallied 3%. Apple edged up 0.3%.
Peter Cardillo, chief market economist at Rockwell Global Capital, said although he believed that, all in all, the final tally of holiday shopping will be “satisfactory,” that might not be good enough to keep the market rally going. “With the market at high levels, momentum is beginning to weaken a bit,” Mr. Cardillo said. “A pullback would make some sense.”
At 10 a.m. EST, the Institute for Supply Management’s manufacturing purchasing-managers’ index for November is expected to slip to 55.2 from 56.4 in October. At the same time, construction spending for October is seen increasing 0.4% on the month.
But investors will be looking ahead to the closely watched November employment report due out Friday, which some believe could determine whether the Federal Reserve starts reducing stimulus measures, by paring back on its $85-billion-a-month bond purchase program, as early as this month.
Mr. Cardillo believes the data this week will show that the economy is growing enough for the Fed to start winding down bond purchases in December or January. “I believe a lot of the tapering [concerns] are already priced into the market,” so any pullback on any Fed move will be minor, he said.
The yield on the 10-year Treasury note rose to 2.784% from 2.746% late Friday.
Front month December gold futures shed 1% to $1,238.60 an ounce to hover around five-month lows. January crude oil futures edged up 0.2% to $92.94 a barrel. In currency markets, the dollar gained against the euro and the yen, but lost ground against sterling.
In Europe, the Stoxx Europe 600 eased 0.2%. Spain’s IBEX 35 index lost 0.7%, Germany’s DAX 30 was virtually flat and the U.K.’s FTSE 100 gave up 0.8%.
Purchasing managers data for euro-zone manufacturing showed little change from preliminary estimates, confirming a modest expansion in activity. But Spain’s purchasing managers’ index showed a surprise return to contraction in November.
“[Spanish PMI] is a disappointment because we had seen a trend of improvement, but people should be wary of reading too much into one month’s number. Markets are quite light, and largely in wait-and-see mode with the ECB and nonfarm payrolls later in the week,” said Julien Seetharamdoo, senior economist and investment strategist at HSBC Global Asset Management, which oversees more than $400 billion in assets.
Separately, data out of Germany showed that orders for plant and machinery dropped 10% from a year ago, industry group VDMA said, hurt by weakness in demand from outside the euro zone.
Asian markets were mostly lower. China’s Shanghai Composite fell 0.6% after the government signaled an imminent end to its moratorium on initial public offerings. That offset a stronger-than-expected report on Chinese manufacturing activity. Japan’s Nikkei Stock Average eased less than 0.1%.
– WALL STREET JOURNAL