U.S. stock-market futures fought to stabilize ahead of Wall Street’s open on Wednesday, with nervousness over a potential U.S.-led attack on Syria continuing to drive commodity prices higher.
Futures for the Dow Jones Industrial Average rose 14 points, or 0.1%, to 14,772, while those for the S&P 500 index added 1.3 points, or 0.1%, to 1,625.50. Futures for the Nasdaq 100 index advanced 3.5 points, or 0.1%, to 3,063.
At 10 a.m. Eastern, a report on pending-home sales for July will be released.
Peter Cardillo, chief market economist at Rockwell Global Capital, says he’s expecting the market to stabilize after the prior day’s big rout.
The Dow Jones Industrial Average closed at a two-month low on Tuesday, sinking 170.33 points, or 1.1%, to 14,776.13. The S&P 500 index saw its worst session since June 20, losing 26.30 points, or 1.6%, to 1,630.48.
Treasury prices rallied on Tuesday, driving the 10-year benchmark yield to its biggest three-day drop in over a year. The yield was up 4 basis points to 2.752% on Wednesday.
“The markets will continue to concentrate on Syria, but I kind of suspect that an attack is already probably baked into markets,” Cardillo said. “The key for the market to stabilize will be oil prices. If oil prices continue to go much higher and increase the geopolitical premium, then there’s a good chance the market may work its way lower.”
Oil prices remained at levels not seen in two years, and gold prices continued to climb Wednesday as investors sought a safe-haven asset amid Syria jitters. Analysts at Societe Generale predicted Brent crude could spike to $150 a barrel if a regional spillover from a U.S.-led attack on Syria causes a big supply disruption in Iraq or elsewhere.
The Washington Post reported late Tuesday that the White House will publicly release evidence of how supporters of Syria’s government used chemical weapons against citizens. That report could come as early as Thursday.
“Intervention in Syria could well turn out to be a ‘Pandora’s Box’, with ramifications which are difficult to envisage at this stage,” said Chris Beauchamp, market analyst at IG, in a note. “When tapering and the change of Fed chairman are thrown into the mix, it looks as if September could be a difficult month for those with a longer-term view.”
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Syria worries continued to roil global markets, with Asia stocks falling. Philippine shares and the Indian rupee were among those hardest hit. Among the major indices, Japan’s Nikkei Stock Average fell 1.5%, and the Hang Seng Index dropped 1.6%.
Source : Marketwatch
