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Data on Producer Prices, Consumer Sentiment Due
TOMI KILGORE And
March 14, 2014 8:20 a.m. ET
About 90 minutes ahead of the open, Dow Jones Industrial Average futures slipped 13 points, or 0.1%, to 16034. On Thursday, the Dow slumped 231 points, or 1.4%, its biggest one-day decline since Feb. 3.
S&P 500 index futures eased one point, or 0.1%, to 1839 and Nasdaq-100 futures tacked on one point, or less than 0.1%, to 3645. Changes in stock futures don’t always accurately predict stock moves after the opening bell.
The S&P 500 fell 1.2% Thursday to end 1.7% below last Friday’s record high close of 1878.04, as investors moved out of riskier assets such as stocks and into the relative safety of bonds and gold amid worries over economic growth in China and rising tensions regarding Russia’s stance on Ukraine.
Tensions between the West and Russia are high ahead of Sunday’s referendum, in which the majority ethnic-Russian region of Crimea will decide whether to secede from Ukraine and join Russia. The referendum, which the European Union and the U.S. have said is illegal, is widely expected to provoke western sanctions on Russia, and investors are fretting about their potential impact on the economy both in Russia and beyond. Russian Deputy Economy Minister Alexei Likhachev has called for a symmetric response.
Adam Sarhan, chief executive of New York-Based investment firm Sarhan Capital, said investors have good reason to be on edge, but it’s still not time to start selling out of stocks and moving into safer investments.
“Markets like clarity, and right now, uncertainty reigns on several fronts,” Mr. Sarhan said. “The big question is, are tensions going to escalate after Sunday?”
The other key uncertainty, he said, is if slowing growth in China will derail the global recovery.
But from an investing standpoint, Mr. Sarhan said the U.S. market still looks good. “The risk-on rally [for stocks] is still in play for 2014,” Mr. Sarhan said. “I’ve been telling my clients, we need more damaging evidence to emerge before we determine that this bull run is over.”
Safe-haven investments, such as bonds and gold, traded little changed early Friday. Gold futures edged up less than 0.1% to $1,373.30 an ounce, after settling Thursday at a six-month high. The yield on the 10-year Treasury note ticked down to 2.649% from 2.656% late Friday. Yields decline as Treasury prices rise.
Crude-oil futures gained 0.5% to $98.68 a barrel. The dollar slipped against the euro and the yen.
At 8:30 a.m. Eastern, the producer-price index for February is expected to rise 0.2% on the month, or by 0.1% when excluding food and energy.
After the open, the preliminary Thomson-Reuters/University of Michigan consumer-sentiment index for March, due out at 9:55 a.m., is seen ticking up to 81.8 from the final February reading of 81.6.
The Stoxx Europe 600 slumped 0.8% to the lowest level seen since Feb. 6, and has lost 3.4% this week.
Germany’s DAX 30 index lost 0.6%, France’s CAC 40 fell 0.9% and the U.K.’s FTSE 100 gave up 0.3%.
Russia’s Micex stock index shed 2.2%, and has lost 18% so far this month, as it heads for the lowest close since May 2010.
“Foreign and local investors are voting with their feet—and leaving Russia. This crisis will inevitably change risk perceptions of Russia, negatively, and these perceptions will be very difficult to overturn,” said Timothy Ash, an analyst at Standard Bank.
Asian markets were also hit hard by Ukraine concerns. Japan’s Nikkei Stock Average slid 3.3%, the biggest one-day loss since Feb. 4, while China’s Shanghai Composite fell 0.7%.
In corporate news, General Mills fell 2.8% in premarket trading after the packaged-food company indicated fiscal third-quarter earnings would fall short of analyst estimates, amid a decline in sales in its U.S. retail business.
Health-care software maker Castlight Health agreed late Thursday to sell 11.1 million shares at an initial public offering price of $16 each, above the range of $13 to $15 predicted earlier this week.
Herbalife said late Thursday that it pushed back its shareholder meeting in April by a week to allow more time to consider adding more of investor Carl Icahn’s nominees to the company’s board of directors. The stock was untraded ahead of the open.