By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Fed nervousness pushes dollar to multiyear highs against
rivals
NEW YORK (MarketWatch) -- Persistent nervousness about what's
seen as an inevitable U.S. rate hike this year unsettled stock
futures Tuesday and pushed the dollar to fresh multiyear highs,
which also took a bite out of commodities.
Investors flocked to Treasurys, sending the yield on the 10-year
note down 4 basis points to 2.15%.
On the other side of the Atlantic, the quantitative easing
measures launched on Monday by the European Central Bank have
pushed European sovereign bond yields down.
"Concerns about what the start of Fed rate hiking could do to
risk sentiment, to volatility and to demand for EM and
higher-yielding assets won't go away on their own," said Kit
Juckes, global macro strategist at Société Générale in a note.
Losses accelerated in the morning, with futures for the Dow
Jones Industrial Average (DJH5) sliding 178 points, or 1%, to
17,792, while those for the S&P 500 index (SPH5) lost 20
points, or 1%, to 2,057.50. Futures for the Nasdaq-100 (NDH5)
tumbled 38.25 points, or 0.9%, to 4,375.25.
Wall Street finished modestly higher on Monday
(http://www.marketwatch.com/story/us-stocks-futures-lower-as-bull-market-marks-sixth-anniversary-2015-03-09),
which marked the sixth anniversary of Wall Street's bull market,
but nonetheless ended below last week's record levels.
Read: The S&P 500 can't fight the market's selloff forever
(http://www.marketwatch.com/story/sp-500-cant-fight-the-markets-selloff-forever-2015-03-09)
(http://www.marketwatch.com/story/sp-500-cant-fight-the-markets-selloff-forever-2015-03-09)Dollar
is king: The dollar surged against the euro (EURUSD) and the
Japanese yen (USDJPY) as investors increasingly took stock of
diverging monetary and economic conditions across the U.S., Europe
and Japan.
Outgoing Dallas Fed President Richard Fisher said Monday
(http://blogs.wsj.com/economics/2015/03/09/feds-fisher-says-raising-rates-soon-will-allow-for-more-gradual-path/)that
robust gains in the job market could begin generating price
pressures and prompt action on rates should be taken sooner rather
than later.
Also read: Unemployment rate may soon start with a '3'
(http://www.marketwatch.com/story/unemployment-rate-may-soon-start-with-a-3-2015-03-09)
Data Tuesday include job openings and wholesale inventories for
January at 10 a.m. Eastern.
Sticking to equities: Analysts at J.P. Morgan said they remain
constructive on U.S. equities, which they note look expensive
relative to history and similar to late-cycle levels, but aren't so
on a country-relative basis.
"The U.S. trades at a 2.4 times premium on price/earnings (next
12 months) basis relative to its 10-year history, whereas the U.K.
and eurozone trade at 4.5 times and 3.8 times, respectively.
Further, equities still look attractive on a cross-asset basis,
given the current yield environment and few attractive investment
alternatives," said the team of strategists led by Dubravko
Lakos-Bujas.
Read: This 6-year-old bull market's big winners: biotech, pharma
and value stocks
(http://www.marketwatch.com/story/this-6-year-old-bull-markets-big-winners-biotech-pharma-and-value-stocks-2015-03-09)
Stocks to watch: Shares of Apple Inc.(AAPL) could stay in focus
for investors a day after the company revealed its new wearable
Apple Watch
(http://www.marketwatch.com/story/apple-shows-off-new-smartwatch-macbook-2015-03-09).
Shares were down about 0.8% in premarket trading.
Also read: Apple Watch may teach us new bad habits
(http://www.marketwatch.com/story/apple-watch-may-be-a-social-disruptor-2015-03-10)
Barnes & Noble Inc. (BKS) will release results ahead of the
market's open, while VeriFone Systems Inc.(PAY) will report after
the close.
Urban Outfitters Inc.(URBN) rose 6.5% in premarket after
earnings topped analysts forecasts late Monday.
Qualcomm Inc.(QCOM) announced a $15 billion share buyback plan
and lifted its quarterly dividend to 48 cents a share from 42
cents, effective March 25. Shares rose 2.3% in premarket.
Other markets: The Nikkei 225 index
(http://www.marketwatch.com/story/chinese-stocks-retreat-after-data-fuel-deflation-fears-2015-03-10)
finished 0.7% lower
(http://www.marketwatch.com/story/chinese-stocks-retreat-after-data-fuel-deflation-fears-2015-03-10),
despite a weaker yen, which in the past has proved a boost for
stocks and exporters. Stocks fell amid reports that the Basel
Committee on Banking Supervision may ask banks to raise capital.
Chinese stocks fell after data showed China's wholesale deflation
worsened in February.
European stocks fell into the red, as Greece debt talks between
Athens and its international creditors will resume on
Wednesday.
Oil prices
(http://www.marketwatch.com/story/oil-prices-hanging-on-fresh-supply-data-2015-03-10)(CLJ5)
pulled back as investors awaited fresh supply data. The U.S. Energy
Information Administration's monthly report is due later Tuesday.
Gold prices (GCJ5) reversed earlier losses and were flat at
$1,167.3 an ounce.
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