Wall Street to open lower after yen intervention
By Rodrigo Campos
Despite the expected early losses, the benchmark S&P 500 index was on track for its largest monthly percentage gain since early 1987.
The U.S. dollar shot up to a three-month high against the yen early Monday as the government of Japan intervened in the market to curb its currency's appreciation, which is hurting the export-based economy.
The higher greenback pressured commodity prices, with copper off 3.2 percent. Shares of Freeport-McMoRan Copper & Gold <FCX.N>, up more than 40 percent so far in October, dropped 3.1 percent to $41.47 in premarket trading.
"After a solid month of gains, the (higher) dollar is giving traders a reason to shy from the risk trade and take some profits," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
S&P 500 futures fell 15.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 99 points, and Nasdaq 100 futures dropped 22.5 points.
S&P 500 futures were just under their 200-day moving average (MA). On the cash market, the index's 200-day MA is at 1,274.25, 0.84 percent below its close on Friday.
The New York Federal Reserve Bank suspended MF Global Holdings Ltd <MF.N> from doing new business with it, and shares of the troubled brokerage were halted as it neared a deal on its future.
Banks stocks were expected to open lower, with the Financial Select Sector SPDR exchange-traded fund <XLF.P> down 2 percent before the opening bell.
U.S.-traded shares of Barclays Plc <BARC.L><BCS.N> fell 2 percent to $12.86 after the British lender said its investment bank suffered a third straight sharp fall in quarterly income, even as its underlying profit rose 5 percent.
Further weighing on stocks, the euphoria over Europe's plan to contain its sovereign debt crisis cooled and Italian and Spanish bond yields soared, prompting the European Central Bank to buy the debt.
At 9:45 a.m., the Institute of Supply Management-Chicago will release its October index of manufacturing activity. Economists forecast a reading of 59.0, compared with 60.4 in September.
Japan sold the yen for the second time in less than three months after it hit another record high against the dollar, saying it intervened to counter speculative moves that were hurting the economy.
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)