BLBG: U.S. Stock-Index Futures Advance After Rout as Exxon Mobil Gains
U.S. stock-index futures rose, indicating the Standard & Poor’s 500 Index will rebound after its worst week in more than two years, amid confidence that the nation’s economy can withstand a global slowdown.
Futures on the S&P 500 (SPX) expiring in March gained 0.7 percent to 2,004.6 at 7:31 a.m. in New York. The benchmark gauge lost 3.5 percent last week to a six-week low as oil prices slumped after the International Energy Agency cut its forecast for global demand for the fourth time in five months. The commodity advanced today, and Exxon Mobil Corp. (XOM) added 1.4 percent in early New York trading.
Dow Jones Industrial Average contracts increased 109 points today, or 0.6 percent, to 17,300. The measure plunged 3.8 percent last week, the biggest drop since November 2011.
“We’re getting a rebound from what remains a nervous market,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “We have reasons to believe that the U.S. economy is in good shape, though this week is a difficult one to call. We’re waiting for a bunch of data, as well as the Fed meeting -- the markets will probably zigzag.”
More than $2.1 trillion was erased from the value of global equities last week as oil prices tumbled on signs of weakening demand, raising concern over the strength of the global economy. The Chicago Board Options Exchange Volatility Index, also known as the VIX (VIX), jumped 78 percent in the past five days, its biggest advance in more than four years.
Fed Meeting
Today, a Federal Reserve report at 9:15 a.m. in Washington may show industrial production rebounded last month, economists projected. Investors are also waiting for the Fed’s update on the timing and pace of interest-rate increases. Policy makers may decide on Dec. 17 whether to keep their pledge to hold interest rates low for a considerable time.
Oil climbed from five-year low, and Exxon Mobil increased after its worst weekly decline in six years. BMO Capital Markets raised its recommendation on the shares of the world’s largest oil company to the equivalent of neutral from a rating similar to sell.
Among stocks moving on corporate news today, PetSmart Inc. rose 4.3 percent after a group led by BC Partners agreed to buy it for $8.3 billion. Iron Mountain Inc. added 3 percent in Germany after Recall Holdings Ltd. rejected its A$2.19 billion ($1.8 billion) takeover offer. Emerson Electric Co. gained 0.7 percent after selling a power-transmissions business to Regal-Beloit Corp. for $1.4 billion.
To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Namitha Jagadeesh