Small caps to open higher with overseas advance
Small-cap stocks are expected to start out the week in the green, lifted by gains in overseas equity indices, a firm tone in the U.S. dollar, and a pullback in crude oil prices. In after-hours trading, the Russell 2000 (NYSE:IWM) was up 0.7%, which would translate to an opening near 725. However, S&P 500 futures were only up about 0.1% moving toward the open, which would be a much more tame advance for small caps.
In overseas markets, Japan’s Nikkei was up 0.6%, while European shares were up about 0.5%, underpinned by profit news from the largest European bank, HSBC, which gained about 2%. The HSBC news could provide a lift early this week for beleaguered U.S. financial shares.
As for the greenback, it was up nearly 1% versus the yen, and about 0.2% against the euro, which should underpin equities if the dollar can maintain firm throughout the U.S. trading session
Crude oil prices peeled off about $2 dollars a gallon from Friday’s record highs, stirred by profit-taking from longs and the firm U.S. currency.
Large-cap stocks of note overnight included Wal-Mart (NYSE:WMT), which was up over 1% on optimism ahead of earnings tomorrow. On the downside, FedEx (NYSE:FDX) was off over 2.5% on slack earnings, and MBIA Inc. (NYSE:MBI) tumbled about 3% overnight on earnings news.