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Aug 22, 2016

U.S. Stock Market Future Indications - August 22, 2016: Dow Futures Dip as Buyers Dither Until Yellen Speaks


U.S. stock futures signaled a dip at the open Monday, as a drop in oil prices outweighed deal news.

S&P 500 futures ESU6, -0.21%  fell by 4.70 points, or 0.2%, to 2,177, while Dow Jones Industrial Average futures YMU6, -0.27% lost 52 points, or 0.3%, to 18,488. Nasdaq-100 futures NQU6, -0.20% shed 10.25 points, or 0.2%, to 4,796.75.
September West Texas Intermediate crude CLU6, -2.66% slumped 2.7% to $47.81 a barrel, with some analysts blaming a rise in the U.S. oil-rig count. Meanwhile,Morgan Stanley analysts poured cold water on hopes that major oil producers will freeze production.

Analysts said the week largely looks set to be quiet until a closely watched speech by Federal Reserve chief Janet Yellen at the central bank’s summer retreat. In her Friday morning speech in Jackson Hole, Wyo., Yellen may indicate the Fed is ready to raise interest rates as soon as next month.
“The markets currently have March priced in for the next rate hike, and if Yellen is seriously determined to move earlier, she must take advantage of Friday’s opportunity to drive that message home,” said Craig Erlam, senior market analyst at Oanda, in a note.
“The rest of the week is expected to be rather quiet,” Erlam added.
On Sunday, the Fed’s No. 2 official, Stanley Fischer, said the central bank is close to its employment and inflation targets, suggesting he is open to further interest rate hikes this year. That helped the dollar DXY, +0.09%  gain on Monday.
There are no top-tier U.S. economic releases or earnings reports expected on Monday.
Last week, the S&P 500 SPX, -0.14%  and Dow DJIA, -0.24%  scored record closes early in the week, then finished the week little changed and just below their record-setting levels.
Company news: Drug giant Pfizer Inc. PFE, -0.60% confirmed it plans to buy biotech Medivation Inc. MDVN, +19.79%  , in a move aimed at adding a leading prostate-cancer drug to Pfizer’s portfolio. Pfizer’s stock dipped 0.3% in premarket action, while Medivation jumped 20%.
In other deal news, ChemChina said Monday that a U.S. national-security regulator had cleared its planned $43 billion acquisition of Swiss seed company Syngenta AGSYNN, +10.77% SYT, +10.60%  .
CST Brands Inc. CST, -0.44% — which runs gas stations and convenience stores — agreed to be bought by Circle K parent Alimentation Couche Tard Inc. in a deal valued at $4.4 billion.
Other markets: European stocks SXXP, -0.10% inched down as early gains evaporated, while Asian markets closed mixed. Gold futures GCZ6, -0.53%  traded lower.