Stock
futures fall as oil weighs, Fed notes global growth
fears
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[August 20, 2015]
By Tanya Agrawal
(Reuters) - U.S. stock index futures fell
sharply on Thursday, a day after minutes from the latest Federal Reserve
meeting highlighted concerns over the state of the global economy and as
oil prices hit their lowest since 2009.
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* U.S. policymakers continued to express broad concerns about
lagging inflation and the weak world economy even as the job market
improved further.
* Traders scaled back bets the Fed would raise interest rates in
September after the minutes. They now see a 35 percent chance of a
rate hike next month, down from 46 percent on Tuesday.
* The dollar index <.DXY> fell after the minutes were released on
Wednesday. Wall Street briefly turn positive after the minutes, but
closed lower, weighed down by oil prices and a fall in materials and
energy stocks.
* The Dow Jones industrial average is poised to stay below its
200-day moving average for the 13th session in a row. The last time
this happened was in August-September 2011, when the index stayed
below its 200-day average for 59 sessions.
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* World bourses were trading lower too. Shares in Asia hit a
two-year low, German stocks were on track for their worst month in
over three years, and British stocks slumped to their lowest since
January.
* Fears of slowing growth in China, which carried the global economy
following the 2008 international financial crisis, has also affected
commodities.
* U.S. crude oil prices fell to almost $40 a barrel on Thursday.
Shares of Dow components Exxon Mobil <XOM> fell 1.4 percent and
Chevron <CVX.N> fell 1.1 percent premarket.
* Valeant Pharma <VRX.N> rose 3.6 percent to $253.78 after the Wall
Street Journal reported that the company is nearing a $1 billion
deal for Sprout Pharmaceuticals, which just won approval to sell a
"female Viagra" drug.
* Disney fell 1.7 percent to $104.63 after theflyonthewall.com
reported Bernstein had cut its rating on the stock to "market
perform".
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* Data scheduled to be released on Thursday includes weekly
unemployment numbers, which is expected to have fallen by 2,000 to
272,000. The data is expected at 8:30 a.m. ET.
* Separately, the National Association of Realtors
releases existing home sales data for July at 10 a.m. ET. Sales are
expected to have slipped to an annual rate of 5.44 million units
last month from 5.49 million units in June.
Futures snapshot at 7:07 a.m. ET:
* S&P 500 e-minis were down 14.5 points, or 0.7 percent, with
216,620 contracts traded.
* Nasdaq 100 e-minis were down 32 points, or 0.71 percent, on volume
of 34,246 contracts.
* Dow e-minis were down 127 points, or 0.73 percent, with 27,557
contracts changing hands.
(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D'Souza)
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