Analyst: 'Market sentiment is fairly negative'
U.S. stocks pointed to a lackluster trading at the open Monday, following two straight sessions of declines as investors remained cautious amid geopolitical tensions and ongoing domestic political turmoil.
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Dow futures were virtually unchanged at 21,6676.00, while S&P 500 futures were flat at 2,426.75. Nasdaq-100 futures were off by 2 points at 5,798.25.
Some analysts suggested that geopolitical tensions and political turmoil in Washington have been preventing the market from recovering after recent bout of volatility.
"Even though the S&P 500 is currently only 2.2% below its August 7 all-time high, the market's current technical action points to the possibility of a decline of deeper proportions," said Sam Stovall, chief investment strategist at CFRA, research firm.
Stovall said the erosion in price momentum of the cyclical sectors, such as technology and financials that had been leading the recent rally, have been adding to the downbeat sentiment.
Other analysts said geopolitical threat will continue to dampen risk appetite among investors.
"With earnings season coming to an end, there is not much to be bullish about right now," said Richard Perry, a Hantec Markets analyst, in a note Monday.
"Market sentiment is fairly negative with geopolitical risk still elevated on the Korean Peninsula," Perry said, adding that "the political risk of Trump's presidency remains a driving factor."
A new cycle of escalation near the Korean Peninsula looked set to begin as the U.S. and South Korea on Monday kicked off annual military exercises (http://www.marketwatch.com/story/tensions-expected-to-rise-as-us-south-korea-start-annual-war-games-2017-08-20) that have a history of enraging North Korea.
President Donald Trump is due to lay out a path for U.S. strategy in Afghanistan (http://www.marketwatch.com/story/trump-to-announce-new-strategy-for-us-in-afghanistan-2017-08-20) in a nationally televised speech Monday night. On Tuesday, Trump is scheduled to speak at a campaign-style rally in Phoenix as he tries to move on from his much-criticized response to the white-supremacist violence in Charlottesville, Va.
Last week, the Dow (http://www.marketwatch.com/story/dow-set-to-fight-for-direction-but-flirts-with-biggest-two-week-drop-in-nearly-a-year-2017-08-18) lost 0.8%, leaving it down 1.9% over two weeks, for its largest two-week percentage decline since mid-September. The S&P dropped 0.7% for the week, and the Nasdaq Composite gave up 0.6%.
Other markets: Oil futures and the ICE U.S. Dollar Index were unchanged, while gold futures inched higher. European equities lost ground (http://www.marketwatch.com/story/fiat-maersk-shares-shine-in-lackluster-european-stock-market-2017-08-21), while Asian markets closed mixed (http://www.marketwatch.com/story/australia-japan-lead-asian-market-decliners-2017-08-20).
Deal news: Shares in Sempra Energy(SRE) jumped nearly 6% following news the San Diego Gas & Electric parent has reached a deal to buy Oncor for $9.45 billion, swooping in to snatch the power-transmission company (http://www.marketwatch.com/story/sempra-outbids-buffetts-berkshire-with-945-billion-deal-for-oncor-2017-08-21) away from Warren Buffett's Berkshire Hathaway Inc.(BRKA)
In European deal news, French oil giant Total SA(TOT) (TOT) has agreed to acquire Danish conglomerate A.P. Moeller-Maersk A/S's (MAERSK-B.KO) (MAERSK-B.KO) oil unit for $7.45 billion (http://www.marketwatch.com/story/total-buys-maersk-oil-unit-in-745-billion-deal-2017-08-21), the latest sign activity is returning to the sector following a three-year slump in oil prices.
Herbalife Ltd. shares surged early Monday after announcing a self-tender offer and confirming it recently held talks on a going-private transaction. The health products distributor said it has commenced a modified Dutch auction self-tender offer to buy for cash up to $600 million of its own shares.
U.S.-listed shares for Fiat Chrysler Automobiles NV(FCA.MI) (FCA.MI) traded 2% higher in premarket action after China's Great Wall Motor Co. (2333.HK) reportedly expressed interest in buying (http://www.marketwatch.com/story/chinese-auto-maker-interested-in-buying-fiat-reuters-2017-08-21) the Italian-American car maker.
Economic news: A July figure for the Chicago Federal Reserve's national activity index is slated to hit at 8:30 a.m. Eastern Time.
Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
But investors are already starting to turn their attention to this week's highlight, the Kansas City Fed's symposium in Jackson Hole, Wyo.(HLF) The event for the world's central bankers starts Thursday.
(END) Dow Jones Newswires
August 21, 2017 08:45 ET (12:45 GMT)