Stocks inch lower, still near highs
David Russell | [email protected]
S&P 500 futures are off less than 0.1 percent, matching similar declines in Europe. Asia was mixed in the overnight session, with China advancing despite drops in most other countries.
Investors are waiting for retail-sales data at 8:30 a.m. ET, existing home sales at 10 a.m. ET and minutes from the last Federal Reserve meeting at 2 p.m. ET. All those reports--especially the Fed transcripts--will be eyed for indications about the future of monetary policy. Interest rates have been climbing since May as money leaves the bond market, so the Fed's purchases are considered necessary to prevent a stampede that could drive up borrowing costs and threaten the broader economy.
The S&P 500 hit an all-time high of 1802 on Monday, reversed lower the same session, and shed another 0.2 percent yesterday. The strength has been widely spread across all sectors, with economically sensitive areas like transports and industrials leading. The last week has also seen money flowing into financials--especially big banks, financial exchanges, loan servicers, life insurers, and credit-rating agencies. Our researchLAB market scanner also shows buying in fracking stocks, trash haulers, and home builders.
In company-specific news, home-improvement chain Lowe's is down 3 percent after third-quarter earnings missed estimates by a penny and profit guidance was weak. Sales were strong, so the home-improvement company appears to be following a pattern of weak margins that has plagued other retailers this earnings season.
J.C. Penney has reversed initial losses after reporting a wider-than-expected loss but saying that sales were "encouraging" so far this month. That bolsters hopes of a successful turnaround at the struggling department-store operator. Agricultural-equipment company Deere is bouncing 4 percent after earnings beat forecasts. Staples and ADT also report this morning, along followed by L Brands and Williams-Sonoma this afternoon.
Trading is mildly bearish in foreign-exchange markets, with the euro and Australian dollar down slightly and the safe-haven Japanese yen up across the board. Copper is posting a small gain while oil and agricultural products are little-changed. Precious metals declined fractionally.