Stock futures pointed to a lower open on Tuesday as traders returned to Wall Street after the long Memorial Day weekend.
S&P 500 futures were down 0.18%, Dow Jones Industrial Average futures fell 0.15%, and Nasdaq futures dropped 0.11%.
The Nasdaq and S&P 500 just barely clinched new records on Friday in a quiet end to the week. The two indexes had also closed out Thursday's session with records on strength in retail earnings. Costco (COST) , Best Buy (BBY) , Guess? (GES) and Abercrombie & Fitch (ANF) each posted positive quarters over the tail-end of last week.
Crude oil prices continued their decline on Tuesday as worries over global supply levels carried over into the new week. Crude had slumped on Thursday after an extension to a global output pact disappointed investors looking for more. The Organization of Petroleum Exporting Countries agreed in Vienna on a nine-month extension to a production-cut deal set to expire at the end of June. Goldman Sachs sees little growth in oil prices this year, projecting a level of $52.39 a barrel for 2017.
West Texas Intermediate crude fell 0.4% to $49.58 a barrel on Tuesday morning.
Consumer spending and personal incomes both rose in April, according to the Bureau of Economic Analysis. Spending grew 0.4%, its largest gain since December. Incomes increased 0.4%, double the rate seen in March. The U.S. savings rate held unchanged at 5.3%.
The Federal Reserve can continue to raise interest rates while also reducing its balance sheet this year, Dallas Fed President Robert Kaplan said on Tuesday. Kaplan, a voting member of the Federal Open Market Committee, anticipates two more interest rate hikes this year.
The U.S. jobs report on Friday could go some way in cementing the chances of a rate hike later this month. The nonfarm payrolls report for May is expected to demonstrate continued strength in the labor market. The U.S. economy is expected to have added 175,000 jobs in May, while the unemployment rate is forecast to hold at 4.4%, according to FactSet estimates. Hourly earnings are anticipated to have risen 0.2% in May.
The Federal Open market Committee, the decision-making arm of the central bank, is next set to meet June 13-14. Markets already have high expectations for an interest-rate increase at the next meeting of the FOMC, the second of three expected hikes this year. Wall Street has priced in a nearly 88% chance of a 25-basis-point increase to the federal funds rate when the FOMC meets, according to CME Group fed funds futures.
The economic calendar in the U.S. on Tuesday includes the S&P Corelogic Case-Shiller Home Price Index for March at 9 a.m., and Consumer Confidence for May at 10 a.m.
Array Biopharma (ARRY) surged 11% in premarket trading after announcing an agreement to work with Bristol-Myers (BMY) to develop a treatment for colorectal cancer. The clinical research collaboration will investigate the safety and efficacy of Array's MEK inhibitor, binimetinib in combination with Bristol-Myers Squibb's Opdivo.
Ensco (ESV) agreed to acquire Atwood Oceanics (ATW) in a deal that creates a company with combined value of $6.9 billion. Ensco will purchase Atwood for $10.72 a share in an all-stock purchase that values the company at a 32% premium to its Friday close. Ensco expects the deal to close in the third quarter.
Chipotle (CMG) has determined that customers could have been compromised by a cyberattack across 48 U.S. states after completing a probe with cybersecurity firms and law enforcement. The burrito chain had its payment systems hacked between March 24 and April 19. In some cases, the stolen data contained the customer's name in addition to their card number, expiration date and verification number.
BlackBerry (BBRY) fell more than 1% before the bell after Raymond James downgraded its rating on the stock to market perform from outperform. Analysts said they are "tapping the brakes" after the company's 42% rise since its last ratings update in August last year.
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