Stocks look to start week lower
Monday, November 8, 2010
NEW YORK (AP) — Stock futures are pointing to a lower start for the week after major market indicators finished last week at their highest levels in more than two years.
With no major economic reports scheduled for Monday, traders will likely take a second look at a rally that has pushed market indexes to levels not seen since Lehman Brothers collapsed in September 2008. The Dow Jones industrial average climbed 2.9 percent last week, while the broad Standard and Poor’s 500 index rose 3.6 percent.
Ahead of Monday’s opening, Dow Jones industrial average futures are down 12, or 0.1 percent, to 11,364. Futures for the Standard and Poor’s 500 index are down 2.1, or 0.2 percent, to 1,219.50, while Nasdaq 100 futures are down 6, or 0.3 percent, to 2,178.75.
Stocks have risen in recent weeks on better-than-expected corporate earnings reports and the introduction of a bond-buying program by the Federal Reserve that is intended to stimulate the economy. The central bank announced last week that it plans to buy $600 billion in Treasury bonds until the middle of next year in an effort to drive interest rates lower and spur spending.
The dollar is up 0.6 percent against a broad basket of currencies. The euro fell 1.1 percent from recent highs, trading at $1.39 after reaching $1.40 at the close of trading on Friday.
Overseas markets were mixed. The Euro Stoxx 50, an index that tracks companies in Europe, is down 0.2 percent. China’s benchmark Shanghai Composite Index rose 1.0 percent.
Traders will get a better indication of consumer spending later in the week as several major retailers announce earnings. Kohl’s Corp., Macy’s Inc. and J.C. Penny Co. Inc. will release their third-quarter earnings on Thursday and Friday. Retailers such as The Gap Inc. and Macy’s rose more than 8 percent last week on better-than-expected October sales that suggest that consumers will increase their spending this holiday season.
Leaders from the Group of 20 industrialized and developing nations will meet Thursday and Friday in Seoul. Tensions have risen between the group regarding trade imbalances and the respective strength of the Chinese yuan and the dollar.