dip with indexes at records
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[July 07, 2014] By
(Reuters) - U.S. stock index futures edged slightly
lower on Monday, indicating a modest pullback from
record levels as investors held off from making big
plays ahead of the start to earnings season.
A strong June jobs report lifted Wall Street to multiple records on
Thursday, the final trading session before the Independence Day
holiday, with the Dow rising above 17,000 for the first time ever.
While the market's uptrend is still viewed as intact, trading may be
light, with few major catalysts on deck. Action may pick up later
this week with the release of results from Alcoa Inc <AA.N> and
Wells Fargo & Co..
Dozens of major companies are scheduled to report next week,
including numerous Dow components. Investors see a slight chance
that profits for S&P 500 companies could return to double-digit
growth for the first time in nearly three years.
S&P 500 e-mini futures fell 3.25 points and were below fair value, a
formula that evaluates pricing by taking into account interest
rates, dividends and time to expiration on the contract. Dow Jones
industrial average e-mini futures fell 23 points and Nasdaq 100
e-mini futures lost 6.5 points.
Wall Street has been strong lately, with major indexes hitting a
series of records and the Nasdaq closing out its third straight
positive week last week.
The CBOE Volatility index is down almost 25 percent so far this
year, closing on Thursday at its lowest level since February 2007.
The "fear index" is at extremely low levels from a historical
perspective, which has some investors concerned that markets are not
factoring in issues that could derail the rally.
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While the June payroll report, which showed the U.S. unemployment
rate falling to its lowest since September 2008, confirmed
expectations that the economy bounced back in the second quarter,
some analysts speculated that it also meant the Federal Reserve
might raise interest rates earlier than had been previously
In corporate news, GT Advanced Technologies fell 6.4 percent
to $18.30 in premarket trading after UBS removed the company from
its U.S. Key Calls list. The stock was the Nasdaq's heaviest
Archer Daniels Midland said it would buy food flavors and specialty
ingredients company Wild Flavors for about $3 billion.
(Editing by Lisa Von Ahn)
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