MARKET SNAPSHOT: U.S. Stocks Tipped For More Gains As Investors Weigh Up U.K. Election Results

By Barbara Kollmeyer, MarketWatch Features Dow Jones Newswires

Stocks set to continue rising on Wall Street from Thursday

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U.S. stock futures moved modestly higher in early trade on Friday, as investors seemed to shake off a surprising result in the U.K. election as a dramatic week of events drew to a close.

Dow Jones Industrial Average futures rose 25 points, or 0.1%, to 21,159, while S&P 500 futures gained 2.55 points, or less than 0.1%, to 2,432.75. Nasdaq-100 futures added 2.5 points, or less than 0.1%, to 5,894.75.

U.S. stock futures were tracking gains in Europe, where the FTSE 100 index moved 0.6% higher, getting a boost (http://www.marketwatch.com/story/ftse-100-futures-swing-higher-as-pound-sinks-to-7-week-low-2017-06-09) as the British pound slumped (http://www.marketwatch.com/story/pound-tumbles-to-7-week-low-as-uk-exit-poll-points-to-hung-parliament-2017-06-08)on the election result. With results in for all but a few seats in the U.K. general election, the vote has ended in a "hung parliament," (http://www.marketwatch.com/story/uk-general-election-results-in-a-hung-parliament-2017-06-09) where no single party holds a majority.

U.K. Prime Minister Theresa May has reportedly said she would not step down (http://www.marketwatch.com/story/uk-prime-minister-theresa-may-says-she-wont-resign-after-election-reports-2017-06-09), amid pressure for her to quit after what many see as a disastrous election campaign. Instead, she is looking to form a minority government, where her Conservative Party would need to rally outside support in each parliamentary vote.

The lack of a clear winner in the ballot also creates many questions for the Brexit process, analysts said. May called the election as a way to strengthen her hand ahead of negotiations for the U.K. to exit from the European Union. She had faced hurdles in parliament to her approach.

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U.S. stocks managed modest gains on Thursday, with the Dow industrials less than 0.1% higher and the S&P 500 up 0.65 point. The Nasdaq Composite rose 0.4%, closing at a record.

In that session, equities nabbed mostly modest gains after investors shrugged off the testimony of former FBI Director James Comey (http://www.marketwatch.com/story/here-are-the-key-takeaways-from-comeys-testimony-2017-06-08-17103012) in front of the U.S. Senate Intelligence Committee and its potential threat to destabilize U.S. President Donald Trump. Banks and uitilties rose as the idea of the so-called reflation trade seemed to show signs of revival.

That reflation trade is linked to investor optimism over the expectations for growth-friendly policies from Trump.

See:'Worst possible outcome'--analysts react to U.K. early election results (http://www.marketwatch.com/story/worst-possible-outcome-analysts-react-to-uk-early-election-results-2017-06-08)

Next up, Fed meeting: Analysts said on the whole, the U.K. election has little real impact on U.S. markets, which have plenty to deal with.

"The U.S. arguably has its own major issues at the moment, namely the Comey/Trump/Russia scandal and next week's potentially rate-hiking Fed meeting, so the reaction to Theresa May's failed attempt at securing a majority may remain localized," said Connor Campbell, financial analyst at Spreadex, in emailed comments.

Traders are expecting a 95.8% probability of a U.S. interest rate increase at the conclusion of the Federal Reserve's two-day policy meeting next week on June 14, CME Group's FedWatch showed (http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html/).

"Only a broad downturn in risk sentiment on the back of strong selling--possibly driven by the need for another election--could weigh on the U.S.," added Craig Erlam, senior market analyst at OANDA. "Any gains in the U.S. today is probably more a reflection of the fact that sentiment has improved in recent weeks than anything U.K. related."

With one session left to go, the Dow industrials are off 0.1%, the S&P 500 is down 0.2% and the Nasdaq Composite is up 0.3% for the week.

The only top-tier economic data scheduled for release Friday is an update on wholesale inventories for April, due at 10 a.m. Eastern Time.

Stocks on the move: Shares of Endo International PLC(ENDP) slumped 13% in premarket trading, keying off a plunge after the close Thursday after the Food and Drug Administration said it has asked the company to stop selling its opioid pain medication (http://www.marketwatch.com/story/fda-asks-endo-to-stop-selling-opioid-in-first-such-move-2017-06-08), reformulated Opana ER, citing concerns about abuse.

U.S.-listed shares of British banks were moving lower in premarket, tracking moves in London. Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN) slid nearly 5%, while Barclays PLC (BCS) (BCS) fell 2%.

Shares of Nvidia Corp.(NVDA) were up nearly 3% in premarket after shares hit a record high Thursday on the back of a price target upgrade by Citi, to $180, the highest on Wall Street (http://www.marketwatch.com/story/nvidia-shoots-to-record-after-citi-establishes-street-high-target-2017-06-08).

Other markets: The British pound sank to seven-week low against the dollar, dropping to $1.2724 from $1.2957 in late trading on Thursday. The dollar was firmer across the board (http://www.marketwatch.com/story/dollar-rises-pound-hits-7-week-low-as-uk-heads-for-hung-parliament-2017-06-09), with the U.S. dollar index , which compares the dollar to a half-dozen major rivals, rising to 97.42 from 97.02 late Thursday.

Crude oil prices (http://www.marketwatch.com/story/oil-prices-pinned-down-by-strong-dollar-supply-worries-2017-06-09) traded mostly flat, while gold edged lower.

In Asia (http://www.marketwatch.com/story/nikkei-returns-to-20000-as-asian-markets-warily-eye-uk-election-2017-06-08), the Nikkei 225 index gained on yen weakness, returning to the 20,000 level, with other markets mixed.

(END) Dow Jones Newswires

June 09, 2017 06:53 ET (10:53 GMT)