Wednesday February 24th

24-02-2016

Dow futures fall 150 points; oil sheds 3%

U.S. stock index futures indicated a sharply lower open Wednesday as global markets slumped once again following oil price declines. Dow futures fell more than 150 points, while S&P and Nasdaq futures also pointed to a sharply lower open, as U.S. crude prices dropped more than 3 percent. Oil, which has been the top of investors' minds for the last few months, again slipped overnight with WTI futures dropping below $31 a barrel. Hopes of an oil production cut were dashed on Tuesday after Saudi Arabia's oil minister Ali bin Ibrahim Al-Naimi signaled no cuts would happen to tackle the global supply glut.European equities followed the negative tone set in Asia overnight where markets traded mostly lower. This came after a negative close on Wall Street on Tuesday. Overall trade volume declined for the fourth-straight day in the U.S. to post the second lowest trade volume day of the year, going back to early January. On the earnings front, L Brands, Salesforce.com, NetEase and Transocean are all due after the close. On the data front, they'll be services PMIs at 9.45 a.m. ET and new home sales figures at 10.00 a.m. ET. Investors will also be watching for more hints on future policy at the U.S. Federal Reserve and whether it will continue its tightening process this year. Richmond Federal Reserve President Jeffrey Lacker said in a Reuters report Wednesday there is still a case for raising interest rates further, a sign the central bank's internal debate over rate hikes remains a live one. St. Louis Fed President James Bullard is due to speak after the closing bell at 7.00 p.m. ET. Fed Vice-Chairman Stanley Fischer said Tuesday that Fed officials "simply do not know" what course of action they would take at their next meeting three weeks from now, adding that it was too early to assess the impact of current market volatility. The Shanghai composite bucked a generally downward trend in Asia on Wednesday as major indexes in Australia, Japan, and Hong Kong all fell. Analysts pointed to a combination of factors that kept investors skittish, including low oil prices, wavering confidence in the ability of central banks to spur growth, weak data, and renewed concerns over China's renminbi. The Shanghai composite gained 26.23 points, or 0.9 percent, to 2,929.56 while the Shenzhen composite was flat at 1,876.47. The Japanese benchmark Nikkei 225 index retraced losses over 1.7 percent early on to close down 136.26 points, or 0.85 percent, at 15,915.79. The broader Topix also pared losses of over 1 percent but finished lower 6.64 points, or 0.51 percent, to 1,284.53. Gold rose above $1,230 an ounce on Wednesday, acting as foil against risk alongside top-rated government bonds as oil's fall rippled into global equity markets. Spot gold rose 0.76 percent to $1,236.20 an ounce, after gaining 1.5 percent in the previous session, when prices benefited from strong inflows into bullion funds. The market's rediscovered role as a shelter for risk-averse investors seemed to be gaining traction, traders and analysts said, even as the dollar gained ground against a basket of major currency rivals.