Stock futures flat as rate concerns weigh
U.S. stock futures pointed to a slightly higher market open on Wednesday, helped by upward momentum late in the previous session, but investors fretted about higher interest rates after a series of warnings about inflation from Federal Reserve officials this week.
Shares of anti-virus software maker Symantec Corp. (Nasdaq:SYMC - news) jumped 6.4 percent to $16.36 before the opening bell on the Inet electronic brokerage network after the company announced a deal with IBM (NYSE:IBM - news).
On the earnings front, BMC Software (NYSE:BMC - news) and H&R Block Inc. (NYSE:HRB - news) are due to report quarterly results on Wednesday.
I wouldn't necessarily go so far as to say momentum is good, but it's not as bad as it could have been because you had a much more positive close to the U.S. markets in the last 30 minutes of trading on Tuesday, said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut.
I think you'll continue to see volatility, and you'll continue to see market swings based on Fed comments.
Standard & Poor's 500 futures were up 2.3 points , slightly above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures were up 17 points, and Nasdaq 100 futures were up 5.5 points.
Investors will listen closely for clues about rates in speeches from Fed officials later on Wednesday as the Fed's next policy meeting on June 28-29 approaches.
On Monday, Bernanke said the Fed will be vigilant on inflation even if economic growth slows. Comments from Fed officials Susan Bies, William Poole and Thomas Hoenig on Tuesday added to concerns.
U.S. stocks sold off on Tuesday in volatile trading but pared losses late in the session as major stock indexes hovered around key technical support levels.
Fed Governor Mark Olson will speak at 9:30 a.m. EST and Federal Reserve Bank of Atlanta President Jack Guynn talks at 12:30 a.m. EST. Former Fed Chairman Alan Greenspan is due to testify on oil imports before the Senate Foreign Relations Committee at 9 a.m. EST.
Trading overseas was mixed on Wednesday, adding to cautious sentiment, as Japan's Nikkei stock average fell to its lowest close since last November. Shares were mixed in Europe before the European Central Bank's interest rate decision on Thursday and Chinese shares fell by their most in four years.
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