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Jul 6, 2016

U.S. Stock Market Future Indications - July 6, 2016: Dow futures slide almost 100 points as Brexit fears keep nagging

Wall Street was set for another downbeat trading day on Wednesday, as Brexit-related uncertainties continued to spook the market and investors stayed on the sidelines ahead of Federal Reserve minutes.

Futures for the Dow Jones Industrial Average YMU6, -0.62%  dropped 97 points, or 0.6%, to 17,665, while those for the S&P 500 index ESU6, -0.67%  lost 11.70 points, or 0.6%, to 2,071. Futures for the Nasdaq-100 index NQU6, -0.75%  gave up 28.25 points, or 0.6%, to 4,376.25.
“Anxiety over the impact of Brexit and its impact on global growth is once more plaguing the mind-set of traders as a safe haven preference is playing out across asset classes,” Richard Perry, market analyst at Hantec Markets, said in a note.
“With the U.S. 10-year Treasury yield back below 1.400%, pressure is growing on Wall Street once more,” he added.
Yields on 10-year U.S. government paper TMUBMUSD10Y, -2.63%  fell to an all-time low of 1.367% on Tuesday and continued to drop on Wednesday to 1.350%. In Japan, the yield on 20-year government bonds turned negative for the first time, in another sign of investors fleeing to safe havens.
The yen USDJPY, -1.17%  rose on Wednesday, with the dollar buying ¥100.89, down from ¥101.74 late Tuesday in New York. The pound GBPUSD, -0.2073%  continued its slide and dropped to a fresh post-Brexit low of $1.2798. Sterling, however, trimmed gains in early morning trade, fetching $1.2940.
The sharp moves in financial markets on Wednesday follow a volatile Tuesday, when U.S. stocks closed firmly lower. All three major benchmarks — the S&P 500 indexSPX, -0.68% the Dow average DJIA, -0.61%  and Nasdaq Composite COMP, -0.82% — snapped a four-session winning streak as the concerns over Brexit started to sink in and oil prices slumped more than 4%.
Economic news: Investors will hear the latest from the Fed on Wednesday when the minutes from its meeting on June 14-15 come out at 2 p.m. Eastern Time. The minutes are expected to shed light on how concerned the central bank was about the U.S. economy in the wake of the lackluster May jobs report and give an indication of how dovish it’ll be at coming meetings.
Earlier in the day, at 8:30 a.m. Eastern Time, trade data from May are due out. They are forecast to show a $40.2 billion deficit.
The Markit services purchasing managers’ index for June is due at 9:45 a.m. Eastern, followed by the ISM nonmanufacturing reading for the same month at 10 a.m. Eastern. Economists polled by MarketWatch expect the ISM to have risen to 53.4%, from 52.9% in May.
Movers and shakers: Shares of Nortek Inc. NTK, +4.05%  could be active after U.K. turnaround specialist Melrose Industries PLC MRO, +33.01%  said it is buying the Nasdaq-listed manufacturer of cooling and heating systems in a $1.44 billion cash deal. Melrose soared 29% in London.
Medivation Inc. MDVN, +2.73%  may also move after the biotech firm said it has signed confidentiality agreements with several potential suitors, including Sanofi SASAN, -2.24% SNY, -1.03% Pfizer Inc. PFZ, +12.75%  and Celgene Corp.CELG, -0.45%
Tesla Motors Inc. TSLA, -1.16%  dropped 2.9% premarket, set to build on a 1.2% loss from Tuesday when the car maker broke a five-session winning streak after disappointing sales figures.
Walgreens Boots Alliance Inc. WBA, +0.55%  is slated to report earnings ahead of the open.
Other markets: European stocks dropped for a third straight day, with the Stoxx Europe 600 index SXXP, -1.79%  down 1.2%. Asian markets closed mostly lower.
Gold GCQ6, +1.32%  surged to a two-year high, amid the continued rush to safety. Oil prices CLQ6, -1.29%  dropped again, as the dollar DXY, -0.13%  inched higher.