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Wall Street ended December with solid gains for both the year and
fourth quarter, though a broad decline on Wednesday pushed the S&P
500 into negative territory for the month.
While the market has had an upward bias since mid-December, with the
S&P rising in seven of the past 10 sessions, many portfolio managers
and traders make adjustments to their holdings early in the new
year. The S&P is about 1.5 percent away from its record close, and
market participants will be questioning whether current levels are
justified.
The CBOE Volatility index <.VIX>, a measure of investor anxiety, is
up 32 percent so far this week, but remains historically at low
levels. Still, a pickup in profit growth may be essential if the
market is to continue adding to its gains.
Oil's drop of about 50 percent was one of biggest stories of 2014
and the sector will continue to be in focus. Crude oil <CLc1> fell
1.8 percent on Friday, erasing earlier gains, as a supply glut
outweighed investors positioning at the new year for a possible
recovery. Oil is set to record its 13th negative week in the past
14, and is at levels not seen since 2009. [O/R]
Linn Energy Llc <LINE.O> cut its 2015 capital budget by 53 percent
because of the drop in oil prices, sending shares down 6.2 percent
to $9.50 in premarket trading.
On Thursday, when the stock market was closed for the New Year's
holiday, General Motors Co <GM.N> announced three new vehicle
recalls, the biggest involving the ignition design of several SUV
and pickup truck models. GM shares were pressured throughout 2014 as
ignition switch problems led to accidents that caused more than 40
deaths and the recall of millions of vehicles. Shares rose 1 percent
to $35.25 in premarket trading.
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Investors were looking ahead to a reading on November construction
spending, which is seen rising 0.3 percent, as well as the Institute
for Supply Management's manufacturing index, which is expected to
fall to 57.6 in December from 58.7.
Despite the gains implied by futures, major indexes remained on
track for a negative week. The Dow is down 1.3 percent, while the
S&P is off 1.4 percent and the Nasdaq has fallen 1.5 percent.
Futures snapshot at 8:02 a.m.:
* S&P 500 e-minis added 8 points, or 0.39 percent, with 103,910
contracts changing hands.
* Nasdaq 100 e-minis were up 18.25 points, or 0.43 percent, on
volume of 14,451 contracts.
* Dow e-minis jumped 72 points, or 0.41 percent, with 14,449
contracts changing hands.
(Editing by Jeffrey Benkoe)
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