Stocks drifted lower on both sides of the Atlantic on Tuesday,
while fresh measures to curb volatility prompted a rally in
China.
In Europe, the Stoxx Europe 600 lost 0.4% as downbeat earnings
hit shares. In the U.S., futures contracts showed the S&P 500
falling 0.2% at the open. Futures, however, don't always accurately
reflect moves after the opening bell.
Stocks have slipped in recent sessions as falling oil prices
weighed on energy shares. The Dow has lost 0.9% in the three
trading days through Monday, and has fallen 3.9% from its all-time
closing high in May. Declines in Apple Inc., which is a hefty
component of the major stock indexes, have also added to the
negative tone. And in the backdrop, investors continue to parse
economic data for clues on when the Federal Reserve could begin
raising rates for the first time in nearly a decade.
"There has been this notion for so many years now that you have
to go in when the market pulls back," said Quincy Krosby, market
strategist at Prudential Financial.
"You come in and buy on the dip because you've got a Fed that's
going to be there for you. That is being questioned now," she
added.
Economic data scheduled for release on Tuesday include factory
orders. The focus shifts to labor-market reports later in the week,
culminating with the government's employment report for July on
Friday.
"If the Fed is in fact intent on liftoff in 2015, you need
growth and demand for the market to go higher," said Ms.
Krosby.
Oil prices rebounded on Tuesday after three straight sessions of
losses, providing some relief for beaten-up U.S. energy stocks.
Crude-oil futures rose 1.8% to $45.97 a barrel. Chevron Corp. and
Exxon Mobil Corp. rose slightly in premarket trading.
The Shanghai Composite Index closed 3.7% higher after Chinese
authorities late Monday moved to clamp down on short selling by
implementing rules under which investors must wait at least one day
to cover their positions and pay back loans used to buy shares.
When shorting a stock, investors sell borrowed shares in the
belief they can buy them back at a much lower price later on,
pocketing the difference.
Investors also kept a sharp eye on the main stock index in
Athens on Tuesday, which fell 4.5% in early trade and was down 2.5%
recently.
On Monday, the benchmark Athex Composite opened for the first
time in just over five weeks and closed 16% lower, representing its
biggest fall in percentage terms since at least January 1991,
according to Thomson Reuters data.
In other markets, the euro was slightly higher against the
dollar at $1.098. Gold futures added 0.2% to $1091.20 an ounce.
Treasury prices slipped, pushing the 10-year yield up to 2.170%
from 2.150% on Monday.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and
Josie Cox at josie.cox@wsj.com
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