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Aug 8, 2016

U.S. Stock Market Future Indications - August 8, 2016: U.S. Stocks Poised for More Highs, as Feel-Good Factor From Jobs Data Lingers

Barbara Kollmeyer

Wall Street stocks could aim at more records on Monday, with futures moving higher as investors continue to take inspiration from last week’s solid U.S. jobs data.
Dow Jones Industrial Average futures YMU6, +0.20%  rose 47 points, or 0.3%, to 18,501, while S&P 500 futures ESU6, +0.20%  gained 4.7 points, or 0.2%, to 2,181.50. Nasdaq-100 index NQU6, +0.28%  added 14.75 points, or 0.3%, to 4,797.75.
A strong start to the week would pick up where Friday’s record-breaking session left off. The S&P 500 SPX, +0.86%  and Nasdaq Composite COMP, +1.06%  each nailed all-time closing highs, up 0.9% to 2,182.87 and up 1.1% to 5,221.12, respectively. It was the first closing record in more than a year for the Nasdaq.
The U.S. economy added 255,000 jobs in July. The reading blasted past analyst’s expectations and breathed new life into stocks, even though that number may nudge the Federal Reserve toward a near-term interest-rate hike.
“The S&P500 and Dow Jones picked up a positive momentum; equity investors appeared comfortable with the idea of a tightening in the U.S.’s monetary conditions,” said Ipek Ozkardeskaya, senior market analyst with London Capital Group, in a note.
Read: Sell everything? This stock-market dares you
Ozkardeskaya said if the U.S. economy continues to improve, the markets could give their blessing to an additional 25-basis-point hike by the end of the year. But she says the major challenge for the Fed is that major central banks around the world are easing.
“Hence, by simply maintaining the status quo, the Fed’s policy path diverges from the rest of the world,” she said.
There is no major economic data on the calendar for Monday.
How to find funds that offer safety and income
Investors should have low-cost, diversified bond funds in their portfolios and not stretch for yield, says Kathy Jones of Charles Schwab.
Oil prices CLU6, +1.44%  rose alongside stock futures on Monday, with September crude up 55 cents, or 1.3%, to $42.34 a barrel.
Stocks to watch: South African furniture retailer Steinhoff International Holdings NV has agreed to buy Mattress Firm Holding Corp. MFRM, +1.47%  for around $2.4 billion in cash. The bid, worth $64 per share in cash, represents a 114% premium over Mattress Firm’s Friday closing price of $29.74.
Wal-Mart Stores Inc. WMT, +0.63%  is expected to announce a $3 billion deal to buy online retailer on Monday, according to Bloomberg News, citing sources.
Tyson Foods Inc. TSN, +0.11%  and Allergan PLC AGN, +0.16%  will report results ahead of the bell this morning, while News Corp. NWS, +0.61%  (the owner of the publisher of this report, MarketWatch) is expected to report earnings after the market’s close.
Other markets: European stocks SXXP, +0.20%  traded moderately higher. The Nikkei 225 index NIK, +2.44%  soared 2.4%, leading strong gains across Asia, on positive reverberations from strong U.S. jobs data.
The Shanghai Composite Index SHCOMP, +0.93%  rose 0.9%. Data released Monday showed Chinese exports continued to fall in dollar terms in July.
The dollar USDJPY, +0.52%  rose against the yen, which eased across the board. Gold prices GCZ6, -0.57%  moved lower, dropping $7.50 to $1,336.50 an ounce on the heels of the sharpest drop in 10 weeks after that jobs data.