Futures on the the Standard & Poor’s 500 Index signaled the benchmark will decline after its biggest two-day surge since 2009, capping a tumultuous week for American stocks.
Futures point to an end of the two-day relief rally that has lifted U.S. stocks
Contracts on the S&P 500 expiring in September lost 0.7 percent to 1,975.5. Concerns about China’s economy spurred a global sell-off that has put the index on track for its worst month since 2012.
American equities rallied for the past two days, mirroring a global relief rally, helped by data showing stronger-than-expected economic growth. Futures on the Dow Jones Industrial Average fell 0.7 percent to 16,538 today.
At an annual symposium in Jackson Hole, Wyoming this week, Federal Reserve policy makers are debating whether growth is strong enough to withstand the first interest rate increase since 2006.
“We need to see a bit of consolidation given the recent rally,” saidGunther Westen, who helps oversee about $28 billion as head of asset allocation and fund management at Meriten Investment Management GmbH in Dusseldorf, Germany. “There’s still insecurity in the markets, investors are still licking their wounds and analyzing the environment to check how much it has changed. The Fed is still looming over the markets so there will be a slow process to recovery.”
Freeport-McMoRan Inc. surged 16 percent in early New York trading after billionaire activist investor Carl Icahn took an 8.5 percent stake in the international natural resources company.
Inflation is the theme at Jackson Hole, where Fed officials and economists have also been discussing market fallout from China’s slowdown that has cast doubt on whether the Fed will raise rates next month. Traders are now pricing in a 28 percent chance the central bank will act in September, down from almost even odds before China’s surprise move to devalue its currency earlier this month.
A report today is expected to show personal spending rose by 0.4 percent in July.
United Continental Holdings Inc. and Activision Blizzard Inc. climbed 2.5 percent and 6.6 percent, respectively after the companies were added to the S&P 500. They will replace Hospira Inc. and Pall Corp.
source: Bloomberg
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