Oil prices pared some losses after Russia reiterated its openness to
talking with OPEC about output cuts, which helped revive hope among
investors that the world's largest producers could act to boost
Shares of oil majors Exxon and Chevron were up about 0.4
percent in premarket trading.
Oil prices have fallen about 70 percent in the past 18 months, hit
by a growing glut and cooling economic growth in China and other
Falling oil prices, tepid U.S. growth and fears regarding a
China-led global slowdown have been major factors for a torrid start
to the year for stocks. The S&P 500 is already down 6.9 percent this
"The market is likely to take its cue today again from oil prices,"
said Peter Cardillo, chief market economist at First Standard
Financial in New York.
"Lower oil prices are a sign of weak global economic activity. And
that's why we have this correlation between oil and other markets."
Cardillo said for stocks to break the correlation with oil, the
market needs to see some sort of stabilization in oil prices and
news out of China that shows that the worst is over.
Dow e-minis <1YMc1> were up 38 points, or 0.24 percent, with 54,797
contracts changing hands at 8:39 a.m. ET. S&P 500 e-minis <ESc1>
were up 5.75 points, or 0.3 percent, with 358,301 contracts traded
and Nasdaq 100 e-minis <NQc1> were up 5 points, or 0.12 percent, on
volume of 54,758 contracts.
Investors have also been keeping a keen eye on U.S. economic data
for clues regarding the pace of future rate hikes by the Fed. Fed
fund futures are pricing in only one hike this year, below the
projection by the Fed's policy board members that rates could be
increased four times.
Investors were also assuaged after New York Fed President William
Dudley said in an interview that continued tightening of financial
conditions would weigh on the decisions of the Fed's policy board.
Payrolls processor ADP showed that private employers added 205,000
jobs in January, higher than the 195,000 expected by economists
polled by Reuters. The data comes ahead of the more comprehensive
employment report by the U.S. government on Friday.
[to top of second column]
At 10 a.m. ET on Wednesday, the ISM is expected to report that its
non-manufacturing sector index slipped to 55.1 in January from 55.3
Weak quarterly earnings by U.S. corporations are adding to the
worries. Fourth-quarter S&P 500 earnings are expected to have fallen
4.4 percent from a year earlier, according to Thomson Reuters data.
Big names scheduled to report on Wednesday includes Metlife, Yum
Brands, and Allstate <ALL.N>.
Chipotle Mexican Grill <CMG.N> was down 5.9 percent at $449 after
the burrito chain said a criminal probe linked to a food-safety
incident at a California restaurant has widened into a national
General Motors <GM.N> was up 1.3 percent at $29.95 after the
automaker's profit beat estimates, while Merck <MRK.N> fell 2.2
percent to $49.30 after the drugmaker reported lower-than-expected
(Reporting by Tanya Agrawal; Additional reporting by Abhiram
Nandakumar; Editing by Don Sebastian)
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