MARKET SNAPSHOT: Wall Street Tipped For A Modest Gain As Investors Turn Their Attention To Fed

By Barbara Kollmeyer, MarketWatch Features Dow Jones Newswires

Shocking U.K. election result brushed aside, for now

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U.S. stock futures moved modestly higher on Friday, as investors shook off a surprising U.K. election result and began to focus on the meeting next week of Federal Reserve policy makers.

Dow Jones Industrial Average futures rose 25 points, or 0.1%, to 21,159, while S&P 500 futures gained 2 points to 2,432.50. Nasdaq-100 futures added 1.25 points to 5,894.25.

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 handful of 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.

Downing Street said Prime Minister Theresa May has now reached an "understanding" with the small Northern Ireland Democratic Unionist Party, whose 10 seats will give her enough seats to govern.

But 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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Need to know: After U.K. election shocker, Brexit itself looks 'surely in trouble now' (http://www.marketwatch.com/story/after-uk-election-shocker-brexit-itself-looks-surely-in-trouble-now-2017-06-09)

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

In that session, equities saw mostly modest gains after investors shrugged off the testimony of former Federal Bureau of Investigation 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.

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.

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, and attention will quickly turn to the Fed next week.

"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 see 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.," said 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."

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 14% in premarket trading after the Food and Drug Administration late Thursday said it 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 4%, while Barclays PLC (BCS) (BCS) fell 2%.

DuPont Fabros Technology Inc.(DFT) soared 13% in premarket after the developer and operator of multi-tenant data centers announced a deal to be purchased by (http://www.marketwatch.com/story/dupont-fabross-stock-soars-toward-record-after-digital-realty-buyout-deal-2017-06-09)Digital Realty Trust Inc (http://www.marketwatch.com/story/dupont-fabross-stock-soars-toward-record-after-digital-realty-buyout-deal-2017-06-09).(DLR)

Shares of Nvidia Corp.(NVDA) were up 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 a seven-week low against the dollar, dropping to $1.2765 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 97.38 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 higher, 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 07:49 ET (11:49 GMT)