Friday February 9th

9-02-2018

Stocks set to open slightly higher as the Dow tries to rebound from 1,000-point plunge

U.S. stock index futures pointed to a slightly higher open Friday, a day after both the Dow Jones industrial average and the S&P 500 fell into correction territory. Around 7:52 a.m. ET, stock futures were pointing to the Dow opening slightly higher by 50 points. The Nasdaq and S&P 500 futures also indicated a positive open. The movements seen in U.S. futures come on the back of a sharply lower finish to Thursday's trade. The Dow dropped 1,032 points Thursday, its second drop of that magnitude this week. As of Thursday's close, the Dow was on track to post its largest weekly decline since October 2008. The recent turmoil in equities began last Friday, when the Dow fell 666 points after a better-than-expected jobs report ignited fears of inflation. That fall was exacerbated Monday after the yield on the benchmark 10-year Treasury note hit a 4-year high, sending the Dow tumbling another 1,175 points as investors grew more nervous about an overheating economy. Trouble with securities called exchange-traded notes that decline in value when volatility increases likely helped create more turmoil in the markets this week. Yields have since backed off their multi-year highs, giving the Dow a 560-point bounce on Tuesday and relative stability on Wednesday. But between another round of strong economic news, hawkish comments from the Bank of England and an expensive government funding bill, yields rallied again, sparking Thursday's sell-off. During Friday's early hours, the Senate managed to pass a short-term funding bill, paving the way to boosting military and domestic spending. The measure then headed to the House, where resistance was expected. Before the U.S. market open, however, the House voted to approve the bill and send it to President Donald Trump for it to be signed — helping end the brief government shutdown. The passing of the bill likely helped keep stock futures afloat, although investors were worried about what the deal would mean for the deficit. Asian shares closed lower on Friday, taking cues from U.S. indexes which extended sharp losses in the last session. Japan's Nikkei 225 fell 2.32 percent, or 508.24 points, to close at 21,382.62 with losses seen in most sectors. The Nikkei 225 was in correction territory, having declined around 12 percent from its 52-week high as of Friday morning. Across the Korean Strait, the Kospi lost 1.82 percent to finish at 2,363.77, with most sectors closing the day in negative territory. Greater China markets were similarly downbeat. Hong Kong's Hang Seng Index lost 2.99 percent by 3:04 p.m. HK/SIN, but was off its session lows. On the mainland, the Shanghai composite fell 4.02 percent to close at 3,130.93 and the Shenzhen composite sank 3.19 percent to end at 1,679.26. The blue chip CSI 300 index fell 4.26 percent by the end of the day. Oil prices fell for a sixth day on Friday, and were on track for their biggest weekly losses in 10 months, as record-high U.S. crude output added to concerns about a sharp rise in global supplies. The drop came amid a rout in global equity markets sparked by inflation fears. Brent futures were down 68 cents, or 1.1 percent, at $64.13 a barrel by 7:47 a.m. ET (1247 GMT). On Thursday, Brent fell 1.1 percent to its lowest close since Dec. 20. U.S. West Texas Intermediate (WTI) crude was down 93 cents, or 1.5 percent, at $60.22 a barrel, having settled down 1 percent in the previous session, its lowest close since Jan. 2. Gold held steady on Friday amid tumbling equity markets, but a firmer dollar and worries about rising global interest rates weighed on prices. Spot gold was mostly unchanged at $1,319 an ounce, at 0715 GMT. Prices touched their lowest since Jan. 4 at $1,306.81 on Thursday. Spot gold was down 1 percent for the week and headed for its second straight weekly drop due to a recovery in the dollar. The dollar index, which measures the greenback against a basket of currencies, has risen over 1 percent so far this week, its best since the week ended Oct. 27, 2017. U.S. gold futures were up 0.1 percent at $1,320.50 per ounce.