By Adam Haigh - Mar 27, 2012 6:25 AM CT
U.S. stock futures were little changed, indicating the Standard & Poor’s 500 Index will remain near the highest level since May 2008, before reports on consumer confidence and house prices.
Futures on the S&P 500 expiring in June gained less than 0.1 percent to 1,415.7 as of 7:25 a.m. in New York, having earlier climbed as much as 0.3 percent. Dow Jones Industrial Average futures advanced 8 points to 13,208.
The S&P 500 soared 1.4 percent to 1,416.51 yesterday, the highest level since May 19, 2008, as Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is still needed to spur employment. The gauge has rallied 13 percent this year as economic reports beat estimates.
“Unemployment is better in the United States and that is supportive of growth,” Otto Waser, chief investment officer at Research & Asset Management AG, told Bloomberg Television from Zurich. “On the other hand, it’s not enough growth to raise interest rates so we have the monetary flood gates wide open. This is a combination that is easily to be read positively for markets.”
Traders pushed the cost of bearish S&P 500 (SPX) options to the highest level in almost five years, locking in gains as equities head for the biggest first-quarter rally since 1998.
Contracts to hedge against a 10 percent loss in the U.S. equity gauge cost 1.63 times more than calls betting on a 10 percent gain, according to data on six-month contracts compiled by Bloomberg. The price relationship known as skew rose to 1.64 on March 13, the highest level since May 2007.
Data from the Conference Board at 10 a.m. in New York may show consumer confidence was little changed this month. The gauge slipped to 70.1 after reaching a one-year high of 70.8 in February, according to a Bloomberg survey of economists.
House prices in 20 U.S. cities probably fell at a slower pace in the year to January, economists said before a report at 9 a.m. The S&P/Case-Shiller index dropped 3.8 percent from January 2011, the smallest decline in three months, the median forecast of economists surveyed by Bloomberg showed.
European Central Bank President Mario Draghi said euro-area governments should continue to take “decisive measures” after the central bank’s liquidity provisions helped restore investor confidence. The ECB has injected more than $1.3 trillion into the banking system since December.
On the Market
Posted: 3/27/12 4:15 PM ET
Down Day as Stimulus Euphoria Wears Off
Following some of the most substantial gains of the year yesterday, U.S. equities were lower today amid mixed economic data and reinvigorated Chinese growth concerns. Treasuries and the U.S. dollar recouped some of yesterday’s losses after the Richmond Fed Manufacturing Index showed manufacturing expansion slowed considerably in the region. The day’s other economic reports were a bit mixed as U.S. consumer confidence deteriorated slightly, but remained close to its highest level in a year, and the S&P/Case-Shiller Home Price Index showed home prices in 20 major U.S. cities fell, but less than was projected. Perhaps the most important report today came from China and showed Chinese Industrial profits falling for the first time since 2009, reinforcing concerns that growth in the world’s second largest economy is slowing. In corporate earnings news, Walgreen Co, Lennar, and Apollo Group continued what has been a strong earnings season, all topping analysts’ expectations.
The Dow Jones Industrial Average fell 44 points (0.3%) to 13,198, the S&P 500 Index moved 4 points (0.3%) lower to 1,413, and the Nasdaq Composite shed 2 points (0.1%) to 3,120. In moderate volume, 730 million shares were traded on the NYSE and 1.6 billion shares changed hands on the Nasdaq. WTI crude oil fell $0.06 to $106.97 per barrel, wholesale gasoline was $0.02 lower at $3.40 per gallon, and the Bloomberg gold spot price pulled back $8.43 to $1,681.75 per ounce. Elsewhere, the Dollar Index—a comparison of the US dollar to six major world currencies— rebounded 0.2% to 79.10.