Stock futures rise after selloff, S&P support eyed
Wall Street equity futures rose on Wednesday, indicating the market may snap its longest losing streak since October 2008, as investors awaited data on the labor market.
The S&P 500 turned negative for the year and fell through its key 200-day moving average on Tuesday as the wrangling over the U.S. debt ceiling faded and investors turned their attention to the stalling economy. Analysts pointed to the March intraday low of 1,249.05 as the next critical level of technical support.
Two key rating agencies confirmed the United States' triple-A rating on Tuesday after Washington struck a last-minute deal to avoid a debt default, but threats of future downgrades remained.
We had a complete repricing of the global equity markets, and investors have begun to look again and see whether at these levels it's worth considering not just the negative effects the deleveraging of the government has created but what could be positive effects as well, said Rick Meckler, president of LibertyView Capital Management in New York.
People are groping here ... at these levels we maybe overreacted a little bit to what has gone on in Washington and around the world.
Moody's Investors Service and Fitch Ratings maintained the top U.S. rating for now, but said more deficit-reduction measures were needed to put the nation's finances in order and retain the rating.
Underscoring the threat, Moody's assigned a negative outlook to its Aaa rating, which means a downgrade is possible in the next 12 months to 18 months. For details, see
Investors will look for the monthly ADP jobs figures, due at 8:15 a.m. EDT for clues on the labor market ahead of Friday's non-farm payrolls report.
S&P 500 futures rose 3.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 22 points, and Nasdaq 100 futures advanced 5.75 points.
The benchmark S&P 500 has fallen for seven straight days as investors grappled with the threat of a U.S. debt default and a string of soft economic data. The benchmark fell for eight straight days in October 2008 during the financial crisis.
China's central bank governor urged Washington to act responsibly in dealing with its debt problems, saying uncertainty in the U.S. Treasuries market would undermine the international monetary system and hamper global growth.
Other U.S. data expected later Wednesday includes factory orders for June and the ISM services index for July, both at 10 a.m. EDT.
Time Warner Inc
Constellation Energy Group Inc
Quarterly reports were also due from MasterCard Inc
Bank of America Corp
European shares fell sharply on Wednesday, tracking steep declines on Wall Street and Asia on worries about the global economy and fears of the euro zone debt crisis spreading to Italy.
Asian stocks fell more than 2 percent and gold sat near a record above $1,660 an ounce over slowing U.S. growth as global factory output stagnates.
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)
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