Stock futures swing ahead of housing, PMI data
London (June 23) U.S. stock futures swung between gains and losses Monday, with snapshots for the housing market and economic growth on tap, and as oil prices bounced higher as the situation in Iraq further deteriorates.
Futures for the Dow Jones Industrial Average DJU4 +0.10% turned up by 16 points, or 0.1%, to 16,874, while those for the S&P 500 index SPU4 +0.01% picked up 2 points to 1,955.40. Futures for the Nasdaq-100 index NDU4 -0.09% were unchanged at 3,810.67.
Last week, the S&P 500 index SPX +0.17% and the Dow Jones Industrial Average DJIA +0.15% extended their run of record highs, and the Nasdaq Composite COMP +0.20% hit its strongest finish in 14 years.
The S&P 500’s advance to record highs came “on the back of a dovish Fed and positive economic data. Improving growth and low bond yields are positive for continued strong equity performance, while elevated valuation gives us some pause,” said analysts at Goldman Sachs in a note late last week.
As political turmoil spreads through Iraq, many predict a similar future for Afghanistan.
The next round of economic data will focus on trends in consumer spending and business investment. Existing-home sales for May are expected to rise to a seasonally adjusted rate of 4.75 million, with the report from the National Association of Realtors due at 10 a.m. Eastern Time. Credit Agricole expects an increase in sales, based on a pickup in pending-home sales over the past two months. In addition, “mortgage interest rates continued to drift lower into the important early-summer sales period,” Credit Agricole analysts wrote.
A gauge of economic activity in May from the Chicago Federal Reserve is due for release at 8:30 a.m. Eastern Time, followed by a preliminary June reading of business activity from Markit’s Purchasing Managers’ Index at 9:45 a.m. Eastern Time. For May, Markit’s final reading of manufacturing conditions totaled 56.4, and readings of more than 50 indicate growth.
Investors received a mixed batch of global PMI reports earlier Monday. HSBC’s closely watched preliminary read on the Chinese manufacturing sector swung to growth from contraction, hitting a seven-month high at 50.8. But business activity in the manufacturing and services sectors in the euro zone slowed for a second straight month in June.
The improved reading in Chinese PMI helped pushed Nymex August oil CLQ4 +0.14% above $107 a barrel in electronic trading, and August Brent crude futures UK:LCOQ4 +0.03% climbed 26 cents to $115 a barrel.
The moves came as Islamist militants over the weekend continued to advance, capturing more towns in northwestern Iraq. U.S. Secretary of State John Kerry began an unannounced visit to Baghdad Monday, with the U.S. trying to build unity with the Iraqi government.
On the corporate front, Oracle Corp. ORCL +0.44% looked set to purchase Micros Systems Inc. for about $5 billion, according to a report from The Wall Street Journal.
General Electric Co. GE +0.30% moved closer to completing the purchase of energy assets from France’s Alstom SA FR:ALO -1.57% after the French government reached a deal to buy a stake in Alstom from its leading shareholder.