Futures drop as investors
fret over rate hike timing
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[September 12, 2016]
By Yashaswini Swamynathan
(Reuters) - U.S. stock index futures
were lower for the third straight day on Monday as oil prices fell
and on increasing speculation about a possible U.S. interest rate
hike as early as next week.
Even as the Federal Reserve has given little indication on the
timing of the next rate hike, investors have taken cues from a
number of top central bank officials hinting at a possible raise at
the Fed's next policy-setting meeting on Sept. 20-21.
Fed Governor and permanent voting member Lael Brainard's speech at
1:15 p.m. ET (1715) will be scrutinized to see if she maintains her
dovish stance on rates or takes a more aggressive posture. Her
speech was announced on Friday.
Other Fed members including Minneapolis Fed President Neel Kashkari
and his Atlanta counterpart Dennis Lockhart are scheduled to speak
at separate events. Both are non-voting members. Lockhart has said
he expects two rates this year.
Low expectations for an interest rate hike this year had partly
helped the benchmark S&P 500 index clock a series of record highs
However, on Friday, the three major U.S. stock indexes saw their
worst decline since the Brexit vote in June, as growing evidence of
an imminent rate hike spooked investors away from riskier parts of
Such prospect pushed the dollar index <.DXY> slightly higher on
Monday, marking the fourth straight day of gains, while oil prices
tumbled nearly 2 percent also amid worries of oversupply. [O/R]
September tends to be a month of lower returns for stocks, and
traders said this year could be no exception given the abundance of
uncertainties including the rate outlook and November's U.S.
Democratic U.S. presidential candidate, Hillary Clinton's illness
added another layer of uncertainty in the markets in the final weeks
before the November elections.
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Traders work on the floor of the New York Stock Exchange (NYSE) in
New York City, New York, U.S., September 9, 2016. REUTERS/Brendan
Shares of technology stocks, including Apple, Alphabet, Facebook and Yahoo were
down more than 1 percent in premarket trading.
Perrigo rose 3 percent after activist investor Starboard Value disclosed a 4.6
percent stake and delivered a letter to the drugmaker's executives.
Futures snapshot at 7:05 a.m. ET:
Dow e-minis were down 109 points, or 0.6 percent, with 15,733 contracts
S&P 500 e-minis were down 12.5 points, or 0.59 percent, with 198,982
Nasdaq 100 e-minis were down 35 points, or 0.75 percent, on volume of 16,955
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)
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