Monday, March 31, 2014

Stock futures rise ahead of Yellen, Chicago PMI

MADRID (MarketWatch) — Hopes for stimulus measures from Chinese and European officials continued to underpin U.S. stock futures on Monday, the last trading day of the month and quarter. Investors were also looking ahead to a speech from Federal Reserve Chairwoman Janet Yellen and a Chicago regional manufacturing survey.

Futures for the Dow Jones Industrial Average (DJM4)  rose 52 points, or 0.3%, to 16,292, while those for the S&P 500 index (SPM4)  rose 6.2 points, or 0.3%, to 1,856.60. Futures for the Nasdaq-100 (NDM4)  gained 14 points, or 0.4%, to 3,577.

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The biggest data of the week will come on Friday, when the U.S. employment report for March is due. Economists are expecting a pop higher in those numbers, which could go some way toward soothing investor worries about the economy.

Monday's only piece of economic data is the Chicago purchasing managers index. Beating consensus, the Chicago PMI accelerated to 59.8 in February, and for March is expected to rise to 60. Any reading above 50 indicates expansion. That data is due at 9:45 a.m. Eastern Time.

Shortly afterward, Fed Chairwoman Yellen will speak on "strengthening communities" to the 2014 National Interagency Community Reinvestment Conference in Chicago at 9:55 a.m. Eastern. She will be introduced by Chicago Fed President Charles Evans.

Naeem Aslam, chief market analyst at Ava Trade, said Yellen's speech is unlikely to bring any new surprise to the market, with the same message of ending quantitative easing this year likely to be pressed home.

"The speculation of quantitative measures by the ECB (European Central Bank) and from the PBOC (People's Bank of China) is what's really pushing the markets today," Aslam said in emailed comments.

Economic data out of the euro zone showed inflation falling to the lowest level since 2009, which will add pressure on the ECB to introduce stimulus at its monetary-policy meeting on Thursday. The Stoxx Europe 600 (XX:SXXP)  remained firmer, while the euro (EURUSD)  fell sharply against the dollar on the inflation news, before moving higher.

Chinese stocks had a bumpy session, with the Shanghai Composite Index (CN:SHCOMP) finishing down 0.4%. It lost nearly 5% in the first quarter, for the sharpest quarterly loss since June, according to FactSet. But investors are clinging to hopes Chinese officials won't let the economy stumble amid a steady stream of downbeat news. The Financial Times published a report on Sunday that said bad loans written off by Chinese state banks had more than doubled last year.

Getty Images Fed Chairwoman Janet Yellen in February.

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The Nikkei 225 index (JP:NIK)  finished up 0.9%, but closed out the quarter with a nearly 9% drop. That was its biggest quarterly fall since June 2012, according to FactSet.

Biotech and Internet stocks like Facebook Inc. will stay in the spotlight after sharp losses last week. Facebook (FB)  logged a more than 10% weekly drop. The tech-heavy Nasdaq Composite (COMP)  suffered a 2.8% fall last week, its worst week in 17 months. The S&P 500 index (SPX)  ended Friday slightly higher, but fell 0.5% on the week. The index is set to finish March and the quarter on a largely flat note.

Earnings are expected from Cal-Maine Foods Inc. (CALM)  and UTI Worldwide Inc. (UTIW)  ahead of the opening bell. See Facebook, Biogen, Cal-Maine are stocks to watch

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