U.S. stocks: S&P record highs may be put to the test

Madrid-Spain (Nov 10)   Stock futures pointed to a slightly higher start for Wall Street on Monday as oil prices rose and investors focused on whether the S&P 500 and Dow industrials can maintain recent record highs.

Futures for the Dow Jones Industrial Average DJZ4, +0.10%  rose 28 points to 17,529, while those for the S&P 500 index SPZ4, +0.17%  2.9 points to 2,028.90. Futures for the Nasdaq-100 index NDZ4, +0.25%  added 11 points to 4,161.75.

The S&P 500 SPX, +0.03%  closed fractionally higher at a record level of 2,031.92 on Friday and gained 0.7% over the week, while the Dow industrials DJIA, +0.11% also closed at a record high — the third-straight day of records for both. That came on the heels of data that showed U.S. jobs growth was mostly muted in October, with a gain of 214,000 falling slightly short of analysts expectations.

Investors will be looking for signs that markets can keep going. Last week was the big one for macroeconomic events, with central banks in the spotlight.

Bank of America Merrill Lynch said in a note Friday that risk assets should move higher in the short term as central-bank policies and data cause investors to reduce cash going into the year-end. But, watch gold closely, said Michael Hartnett, the investment bank’s chief investment strategist.

“A sudden gap lower in the gold prices to below $1,000/oz should coincide with the final thrust higher in stocks, both indicating capitulation of the ‘stubborn bears’, the end of the ‘melt-up and the next opportunity to get tactically bearish,” said Hartnett.

Gold prices GCZ4, -0.34%  hovered around $1,170 an ounce on Monday, while crude prices CLZ4, +0.98% were legging it higher toward midday in Europe. Crude was up 1.4%, and Brent oil LCOZ4, +1.45%  was gaining nearly 2%. Oil rose amid reports of renewed fighting in eastern Ukraine.

Source: MarketWatch