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Energy Slump Knocks S&P 500 Futures Off Record

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January 10th, 2017

US stocks ended mostly lower on Monday, as plunging energy shares knocked the S&P 500 off record highs.

The Standard & Poor’s 500 Index declined 8.08 points, or 0.4%, to close at 2,268.90. The benchmark gauge opened lower and held in negative territory throughout the day, reflecting weaker futures trading in the pre-market hours.

S&P 500 Futures

The large-cap index rose to fresh record highs on Friday, as volatility fell to the lowest level since the summer. The CBOE VIX, Wall Street’s preferred measure of uncertainty, rose on Monday for the first time in five sessions.

Slumping energy shares were the major catalysts for the weak performance on Wall Street. The S&P 500’s energy index closed down 1.5%, as oil prices plunged to three-week lows.

Crude oil fell nearly 4% in belated response to a report on Friday showing the tenth consecutive weekly rise in active US rigs. Baker Hughes said the active rig count rose by four to 529, the highest in a year.

Other sectors to underperform the market included utilities and telecommunications services, which fell 1.3% and 1.1%, respectively. Shares of consumer staples companies declined 0.7%, while industrials fell by the same amount.

Financals were down 0.8% and real estate slumped 0.6%. Discretionary stocks also slumped.

Health led the gainers, rising 0.4%. Information technology advanced 0.2%.

The Dow Jones Industrial Average fell further below the elusive 20,000 mark. The industrial blue-chip index closed down 76.42 points, or 0.4%, at 19,887.38.

The Nasdaq Composite Index bucked the downtrend, climbing 10.76 points, or 0.2%, to end at a new record of 5,531.82.

Traders are gearing up for an active earnings season that shifts into high gear later this month. S&P 500 earnings are expected to grow 3% year-over-year for the fourth quarter, according to financial data provider FactSet. Analysts have remarked that the pre-announcement season has been quiet, which portends for a positive earnings quarter.

 - Economic Calendar.

See Also: S&P 500 News Blog Dow Jones Industrial Average


Stocks in U.S. Fluctuate as S&P 500 Heads for Its Best December Since 1991

December 31st, 2010

U.S. stocks swung between gains and losses, with the Standard & Poor’s 500 Index heading for its second straight annual advance and its best December since 1991.

Hewlett-Packard Co. and Microsoft Corp. fell at least 0.7 percent to lead losses in the Dow Jones Industrial Average. CVS Caremark Corp. gained 0.1 percent after the drugstore operator agreed to buy a unit of Universal American Financial Corp. Borders Group Inc. slumped 19 percent after suspending payments to some publishers. Alcoa Inc. rose 1.6 percent for the biggest gain in the Dow.

The S&P 500 fell less than 0.1 percent to 1,257.69 as of 11:21 a.m. in New York. The index has climbed 13 percent this year and 6.5 percent this month. The Dow slipped 1.66 points, or less than 0.1 percent, to 11,568.05 today, and is up 11 percent this year. The 2010 advance follows a 23 percent rise in the S&P 500 in 2009, making it the biggest two-year advance since the Internet-bubble rally of 1998 and 1999.

“This year has been like a long road trip. It wasn’t always pleasant while on the way, but it was good once we reached the destination,” said Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $340 billion. “Today we have skeleton crews at investment houses and trading shops so it’s likely going to be a very light day.”

Earnings, Fed Moves

The S&P 500 advanced 23 percent from its July low through yesterday as companies reported better-than-estimated earnings and the Federal Reserve pledged to buy up to an extra $600 billion in Treasuries to stimulate the economy. Its rally to a two-year high has pushed its valuation to 15.7 times reported profits, the most since June.

This year’s increase for the benchmark index for U.S. equities means the gauge has risen for seven of the past eight years. The index’s 86 percent surge from a 12-year low on March 9, 2009, is the biggest for a comparable time period since 1955, according to Howard Silverblatt, senior index analyst at S&P.

The S&P 500’s advance sent the gauge above 1,251.70 on Dec. 21 for the first time since Sept. 12, 2008, the last trading day before Lehman Brothers Holdings Inc. filed the world’s biggest bankruptcy and prompted a 46 percent drop for the benchmark gauge through March 2009. The December rally for the benchmark index comes after it lost 0.2 percent in November and posted a combined gain of 13 percent in September and October, the biggest increase during those months since 1998.

‘Optimistic’ on 2011

“I’m quite optimistic about the performance of equity markets in the year ahead,” said Andrew Popper, chief investment officer at SG Hambros Bank Ltd. in London. “We have the conditions in place for seeing this rally continuing. The economy is recovering at a global level.”

The benchmark gauge for American equities will rise 9.2 percent from yesterday’s close of 1,257.88 to 1,374 in 2011, bringing the increase since 2008 to 52 percent, according to the average of 11 strategists in a Bloomberg News survey.

Hewlett-Packard, the world’s largest computer maker, retreated 0.9 percent to $41.89 and Microsoft fell 0.7 percent to $27.67 as technology companies led declines in the S&P 500, dropping 0.4 percent as a group.

CVS Caremark gained 0.1 percent to $35.04. The drugstore operator said it will acquire the Medicare Part D business of Universal American Financial for about $1.25 billion. Universal American surged 37 percent to $20.

Clearwire Corp., a company creating a nationwide high-speed wireless network using WiMax technology, slumped 1.3 percent to $5.15 after it said Chairman Craig McCaw will step down today.

Borders slumped 19 percent to 93 cents. The bookstore chain has suspended payments to some publishers as refinancing talks continue, the Wall Street Journal reported, citing Publishers Marketplace.

Alcoa, the largest U.S. aluminum producer, rose 1.6 percent to $15.44.

Imax Corp. rallied 11 percent to $29.79. Sony Corp. may be preparing to bid more than $40 a share for the company that designs and makes giant-screen movie theaters, the Daily Mail reported, citing London traders. Walt Disney Co. may also be interested in bidding for Imax, the newspaper said.

 - Nikolaj Gammeltoft in New York at Bloomberg.