Lennar Corp shares jump after beating earnings estimates
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U.S. stock-index future pared premarket gains Tuesday, with the S&P and Dow on track to open lower but linger near record territory.
Futures for the Dow Jones Industrial Average were flat at 21,459, while those for the S&P 500 index declined 2 points to 2,446. Futures for the tech-heavy Nasdaq-100 index climbed by 3 points, or 0.1%, to 5,769.
Futures pulled back slightly after Boston Fed President Eric Rosengren said that low interest rates do pose financial stability concerns that central bankers and the private sector must take seriously.
Rosengren's remarks come a few days after the Federal Reserve raised interest rates by a quarter of a percentage point and outlined a plan for shrinking of its massive balance sheet. A speech by House Speaker Paul Ryan on tax reform was in the limelight as well.
Tech stocks were among the biggest gainers on Monday, helping the Nasdaq Composite Index to a 1.4% jump. The S&P 500 and Dow industrials were also encouraged by the tech rally, each closing at records with gains of 0.8% and 0.7%, respectively.
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The latest "tech resurgence" suggests "the recent sector selloff may have been more 'tech check' than the 'tech wreck' some had forecast," said analysts at Accendo Markets in a note.
The Nasdaq Composite has moved sharply lower over the past two weeks on concerns the high-value tech industry is in a bubble. There are also fears that higher Federal Reserve interest rates will trigger a market move into more defensive stock sectors.
Read:Tech selloff remains a concern after Fed hike, tepid economic growth (http://www.marketwatch.com/story/tech-selloff-remains-a-concern-after-fed-hike-tepid-economic-growth-2017-06-17)
Fed speakers: Chicago Fed President Charles Evans said late Monday the central bank could be done raising rates this year (http://www.marketwatch.com/story/feds-evans-says-possible-there-will-be-no-more-rate-hikes-this-year-2017-06-19). He said he supports the current policy of "very gradual" interest-rate hikes and a slow reduction of the balance sheet. Earlier on Monday, New York Fed President William Dudley struck a hawkish tone (http://www.marketwatch.com/story/feds-dudley-says-hes-not-paying-attention-to-bond-markets-signals-of-concerns-2017-06-19), arguing against slowing the pace of interest-rate increases.
In other Fed news, vice chairman Stanley Fischer said early Tuesday that he was worried memories might be fading (http://www.marketwatch.com/story/feds-fischer-says-hes-worried-memories-are-fading-about-housings-pivotal-role-in-financial-crisis-2017-06-20) about the pivotal role that housing played in the financial crisis.
In a speech in Amsterdam to a conference co-sponsored by the central banks of Sweden and the Netherlands, Boston Fed President Eric Rosengren (http://www.marketwatch.com/story/feds-rosengren-says-low-interest-rates-do-raise-financial-stability-concerns-2017-06-20) said lower rates may be a more permanent feature on the economic landscape because they reflect broad population trends.
Dallas Fed President Rob Kaplan will participate in a moderated discussion at the Commonwealth Club of California in San Francisco at 3 p.m. Eastern.
The ICE Dollar Index was flat at 97.586 as investors digested the latest Fed news.
On the economic docket for Tuesday, the current-account deficit for the first quarter rose by 2.5% to $116.8 billion in first quarter. See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
(http://www.marketwatch.com/economy-politics/calendars/economic)Politics: House Speaker Paul Ryan is set to deliver his first major speech on tax reform at 12:45 p.m. Eastern. He is expected to express confidence that the Republican can deliver on their promises of a major tax overhaul this year, despite a range of challenges facing his party.
One of the biggest hurdles is agreeing on whether or not to add a border adjustment to the corporate tax, which would tax imports and exempt exports.
Hopes for a groundbreaking tax shake-up were partly behind the so-called Trump trade that lifted stocks sharply after the election in November. However, after the Republicans struggled with pushing through their health-care reform earlier this year, investors started to scale back expectations of imminent changes.
Stock movers: Shares of Lennar Corp.(LEN) rose sharply after the home builder reported fiscal second-quarter results that were well above expectations.
Tesla Inc.(TSLA) gained 3.6% ahead of the bell after the electric-car maker was found "not guilty" (http://www.marketwatch.com/story/tesla-found-not-guilty-in-fatal-may-2016-crash-says-ntsb-2017-06-20) in a May 2016 fatal crash.
U.S.-listed shares of Barclays PLC (BCS) were down 1% premarket after the U.K. Serious Fraud Office charged the bank and four former executives with conspiracy to commit fraud (http://www.marketwatch.com/story/barclays-4-former-top-execs-charged-with-fraud-2017-06-20) in a case related to fundraising in Qatar during the financial crisis.
Other markets:Asian stocks closed mixed (http://www.marketwatch.com/story/nikkei-leaps-to-22-month-high-other-asian-markets-quiet-2017-06-19), with Japan's Nikkei 225 index rising for a third straight day.
European markets mainly advanced (http://www.marketwatch.com/story/european-stocks-get-a-lift-from-consumer-shares-tech-recovery-2017-06-20), setting Germany's DAX 30 index on track for a fresh record.
Crude oil sank to a fresh seven-month low (http://www.marketwatch.com/story/oil-hovers-at-seven-month-low-as-investors-weigh-up-supply-issues-2017-06-20), falling more than 2% to $43.36 a barrel. Gold was trading unchanged.
(END) Dow Jones Newswires
June 20, 2017 09:06 ET (13:06 GMT)