Wednesday, 27 Nov 2024

Wall Street set for flat open after three-day surge

(Reuters) – U.S. stocks were set for a mostly flat open on Tuesday, pausing after a three-day surge on Wall Street as investors looked for more signs of strength in the economy in the wake of growth worries.

A surprise rebound in China’s manufacturing data and better-than-expected U.S. numbers pushed the S&P 500 to near six-month highs on Monday. The benchmark index closed about 2% below a record closing high it hit in late September.

“We had a pretty good rally yesterday and I think part of it was overdone,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

“We’re still in this mixed economic data range where you’re really not going to see it driving (markets) one way or the other.”

Wall Street’s efforts to reclaim record levels have been hindered by trade uncertainties, the Federal Reserve’s plans to end monetary policy tightening and a chaotic Brexit.

In a warning signal, carmaker Ford Motor Co is spending tens of millions of euros to prepare for a possible British exit from the European Union without a trade deal, its Europe chairman said.

World trade shrank by 0.3% in the fourth quarter of 2018 and is likely to grow by 2.6% this year, slower than the 3% growth in 2018 and below a previous forecast of 3.7%, the World Trade Organization (WTO) said.

The WTO said trade had been weighed down by new tariffs and retaliatory measures, weaker economic growth, volatility in financial markets and tighter monetary conditions in developed countries.

After a set of upbeat manufacturing data eased some of those worries on Monday, investors are awaiting more economic data to confirm the U.S. economy is on a strong footing.

A Commerce Department report on Tuesday showed new orders for key U.S.-made capital goods unexpectedly fell in February and shipments were unchanged.

Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, slipped 0.1 percent. Economists polled by Reuters had forecast it to remain unchanged.

All eyes will be on the March employment numbers that are due on Friday.

Energy stocks will be in focus as oil hit a 2019 high of more than $69 a barrel on the prospect that more sanctions against Iran and further Venezuelan disruptions could deepen an OPEC-led supply cut. [O/R]

At 8:44 a.m. ET, Dow e-minis were down 1 point. S&P 500 e-minis were up 2.5 points, or 0.09% and Nasdaq 100 e-minis were up 8 points, or 0.11%.

Shares of drugstore chain Walgreens Boots Alliance Inc slid over 9% after the company cut its 2019 profit growth forecast and reported a quarterly profit that missed Wall Street estimates.

Dow Inc shares were up 1.6% ahead of its stock market debut following spin off from DowDuPont. The stock is set to replace DowDuPont in the Dow Jones Industrial Average and Brighthouse Financial Inc in the S&P 500.

Ride-hailing company Lyft Inc’s shares were down 3.6% after falling below their IPO price in just its second day of trading on Monday.

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