Stocks Little Changed After Better-Than-Expected Trade Data
NEW YORK (TheStreet) -- Stock futures were little changed Tuesday after a better-than-expected U.S. trade report and as investors continued to await more clues, including from the upcoming Friday jobs report, on whether the Federal Reserve is more likely to curtail or maintain its current economic stimulus program.
Markets are expected to stay volatile ahead of the widely watched U.S. jobs report on Friday, which is forecast to show that the unemployment rate remained unchanged at 7.5%.
"Given how successful QE has been in keeping interest rates low and encouraging investors the world over to increase portfolio risk in search of higher returns, it's logical the threat of declining stimulus would induce knee-jerk profit taking, in our view," Alec Young, global equity strategist at S&P Capital IQ in New York, wrote in a report.
Young added that last month many of the global equity markets performed worse than average in an already historically weak May, with the culprit lying in the increasing investor concern that improving U.S. economic momentum will lead the Fed to taper its $85 billion-a-month bond buying stimulus program sooner than previously anticipated.Futures for the S&P 500 were up 2.75 points, or 0.13 points below fair value, to 1,639. ExactTarget (ET) was soaring 52.99% to $33.82 while Salesforce.com (CRM) shares were falling 3.22% to $39.72 in premarket trading. Salesforce.com, the largest maker of online customer-management software, is buying cloud marketing platform company ExactTarget for $2.5 billion to further strengthen Salesforce's position in cloud marketing services. Dollar General (DG) was tumbling more than 6.5% to $49.92 after the discount retailer reported in-line first-quarter earnings of 71 cents a share and slashed its full-year earnings outlook to below Wall Street expectations, driven by slowing sales growth. Buffalo Wild Wings (BWLD) was knocked off Baird Equity's "Focus Idea" list, with analysts citing valuation as the reason. Baird's is keeping its "outperform" recommendation on the restaurant chain's stock. Futures for the Dow Jones Industrial Average were up 10 points, or 13.03 points below fair value, to 15,227. Futures for the Nasdaq were rising 7.5 points, or 2.96 points above fair value, to 2,993. U.S. stocks gained Monday on prospects that worse-than-expected manufacturing data will prompt the Fed to continue its stimulus program to bolster the economic recovery. The Census Bureau reported that the U.S. trade deficit widened by a less than expected $40.3 billion in April from an improved revision to the March deficit to $37.1 billion. Economists, on average, were expecting a deficit of $41 billion in April. A number of Federal Reserve officials speak Tuesday, including Fed Governor Sarah Bloom Raskin at 12:30 p.m., Kansas City Fed President Esther George at 1:30 p.m., and Dallas Fed President Richard Fisher at 8 p.m. The DAX in Germany was rising 0.37%. The UK FTSE 100 was higher by 0.55%. The Nikkei 225 settled up 2.05%, while Hong Kong's Hang Seng ticked up 0.01%. Follow @atwtse Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.
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