KCG Morning Update:
U.S. stock-index futures were little changed, after the Standard & Poor’s 500 Index set a record, as
investors awaited reports on initial jobless claims and service-industry activity.
Gilead Sciences Inc. rose 1.7 percent in early New York trading after the drugmaker said a phase-three clinical trial for one of its products met its primary endpoint. IRobot Corp., which makes robot vacuum cleaners, advanced 2.9 percent in German trading after announcing a share-buyback program.
Futures on the S&P 500 expiring in June gained 0.1 percent to 1,884.6 at 7:33 a.m. in New York. The equity benchmark rose to a record 1,890.9 yesterday. The index climbed 1.3 percent in the first three months of 2014, its fifth consecutive quarterly advance. Dow Jones Industrial Average contracts added 22 points, or 0.1 percent, to 16,509 today.
“Any negative reports are largely ignored at the moment, or only taken into account in the very short term,” said Kai Fachinger, who oversees about $700 million as a money manager at RobecoSAM AG in Zurich. “This shows the clear optimism of investors, and the market could rise even more, especially if
tomorrow’s employment report comes in with good numbers. The risk of slight setbacks has increased, but for today investors will probably just take it easy.”
A Labor Department report at 8:30 a.m. in Washington may show that more Americans applied for unemployment benefits last week. Jobless claims rose to 319,000 in the seven days through March 29, according to economists surveyed by Bloomberg News. That compares with 311,000 for the previous week. The monthly jobs report due tomorrow will show that hiring increased in March, according to forecasts compiled by Bloomberg.
The Institute for Supply Management’s services index advanced to 53.5 last month from 51.6 in February, economists predicted. The ISM releases the data at 10 a.m. Readings above 50 mean that activity expanded.
European stocks were little changed, after climbing for seven days, as the European Central Bank kept
its benchmark interest rate at a record low. U.S. stock-index futures and Asian shares were also little changed.
Nokian Renkaat Oyj slid 2.6 percent after cutting its 2014 profit and sales estimates because of weaker Russian demand. Deutsche Bank AG dropped 1.6 percent as JPMorgan Chase & Co. downgraded Germany’s largest lender on capital concerns. Pernod Ricard SA fell 1.9 percent as Credit Suisse Group AG recommended selling the stock. BTG Plc added 2.3 percent after saying annual sales will be near the top of its forecast range.
The Stoxx Europe 600 Index slipped 0.2 percent to 336.26 at 12:46 p.m. in London, following its longest winning streak since October. The equity benchmark has climbed 3.7 percent since March 24 as improving U.S. data signaled the world’s largest economy is recovering from the harsh winter. Contracts on the Standard & Poor’s 500 Index gained 0.1 percent today, and the MSCI Asia Pacific Index added 0.1 percent.
• Support:1885, 1879, 1870
• Resistance:1894, 1898, 1908
Parallels between the current bull market in U.S. stocks and a 1980s surge point toward a decline later this year, according to Jim Paulsen, chief investment strategist at Wells Capital Management.
As the CHART OF THE DAY illustrates, the rally since March 2009 has now outlasted one from August 1982 to August 1987. The Standard & Poor’s 500 Index rose 179 percent through yesterday, approaching the 229 percent gain for the earlier advance.
“Investors should wonder a bit about how much 2014 may ‘rhyme’ yet later this year with the 1987 stock market,” Paulsen wrote yesterday in an e-mail about the comparison.
The S&P 500 peaked on Aug. 25, 1987, and plunged 20 percent in a day less than eight weeks later, on Oct. 19. Paulsen said yesterday in an interview that he isn’t expecting a recurrence of the Black Monday crash.
“We’ll have a correction to bring us back to where we started the year” after the S&P 500 advances to 2,000, the Minneapolis-based strategist said. The index began 2014 at 1,848.36, or 7.6 percent below his projected peak.
Renewed concern among investors about faster inflation may lead to the decline, he said. Consumer prices increased at no more than a 2 percent annual rate from November 2012 through February, according to data compiled by the Labor Department.
