Market Hustle: Stock Futures Pare Losses on Upbeat U.S. Manufacturing Data
NEW YORK (TheStreet) -- U.S. stock futures were paring losses slightly Monday as stronger-than-expected U.S. manufacturing and consumer spending reports helped inject some confidence into a generally risk-averse global market environment.
Futures have been in the red throughout premarket trading amid rising conflict in Ukraine and tepid Chinese manufacturing data.
- Dow Jones Industrial Average futures were dropping 125 points, or 125.71 points below fair value, to 16,182. S&P 500 futures were off 15.75 points, or 15.85 points below fair value, to 1,841.75. Nasdaq futures were down 33 points, or 32.85 points below fair value, to 3,662.3.
- At 57.1 in February, up from 53.7 in January, the final seasonally adjusted Markit U.S. Manufacturing Purchasing Managers' Index signaled the strongest improvement in business conditions for 45 months, Markit Economics reported. Economists were expecting a reading of 56.6.
- U.S. personal income rose 0.3% in January and spending increased 0.4%, according to the Bureau of Economic Analysis. Economists were looking for increases of 0.3% and 0.1%, respectively.
- The troubles surrounding Ukraine have risen to new heights and were keeping the global markets on edge as Russian military forces reportedly took control over Ukraine's Crimean peninsula overnight. The FTSE 100 in London was down 1.67%, the DAX in Germany was off 2.64%, the Hong Kong Hang Seng finished down 1.47%, and the Nikkei 225 in Japan slid 1.27%.
- "There are a lot of unknowns surrounding the implications of military action and more practically the political and trade sanctions the UN and others may bring to bear," Ian Lyngen, a bond strategist at CRT Capital Group in Stamford, Conn., said in a note. He added that the global energy complex is currently at greatest risk in this current environment.
- Weak Chinese manufacturing data didn't help the mood either. China's official manufacturing PMI dropped to an eight-month low of 50.2 in February, heading closer to contraction. Meanwhile, the final Markit/HSBC manufacturing Purchasing Managers' Index showed a decline to a seven-month low of 48.5 in February.
- Berkshire Hathaway (BRK.B - Get Report) was slipping 0.44% in premarket trading after announcing record earnings of $19.5 billion in 2013. Book value per share increased 18.2% vs. the S&P 500's 32.4% climb.
- Jos. A. Bank Clothiers (JOSB - Get Report) was rising 0.68% as Men's Wearhouse (MW - Get Report) confirmed that it entered into a non-disclosure agreement with Jos. A. Bank under which the companies have agreed to exchange certain confidential information and to work in good faith to evaluate a potential combination. Men's Wearhouse has received a draft merger agreement from Jos. A. Bank.
- Other economic releases scheduled for Monday include the February ISM Manufacturing Index at 10 a.m., and January construction spending at 10 a.m. Automakers, including General Motors (GM) and Ford (F), will report sales for February.
- Stocks closed higher on Friday amid a stronger reading for consumer confidence, buoyed by assurances Thursday that the Federal Reserve will continue to support markets.
- Despite Monday's overall downbeat tone, S&P Capital IQ's New York-based chief equity strategist, Sam Stovall, noted in a report that this bull market is poised to enter its sixth year on Monday, March 10. And should this bull market celebrate its sixth birthday and perform similarly to prior sixth-year bulls, it could go up another 26% to beyond 2340.
-- Written by Andrea Tse in New York
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