US Stocks Futures Decline Before Bernanke; Oil Climbs.
US stock futures declined Wednesday. The decrease was attributed to the concerns involving Iran, which has pushed crude oil prices stridently higher.
Following Tuesday’s close, crude oil futures in the US spiked $5 a barrel. Separately, a US naval vessel had clashed with Iran, but the issue was swiftly dismissed by the US. The incident is said to trigger the sharp decline of US stock futures in the electronic trade. Early Wednesday, oil prices rose by 1.12 at $64.05 a barrel. Britain, on the other hand, denied other market talk. It had sent troops to release 15 British military personnel being held in Iran.
On Wednesday, Fed Chairman Ben Bernanke is expected to answer queries about the subprime mortgage market when he testifies before the congressional Joint Economic Committee of Congress.
“The spike in crude oil rattled the markets and shows how volatile that market can be,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. But “the big event is Bernanke’s testimony. There seems to be a lot of confusion over the Fed statement last week, so I think congressional leaders will try to get him to clarify what that statement meant.”
S&P 500 futures decreased by 5.10 points, lower than the fair value, a formula that evaluates pricing by considering interest rates, dividends and time to expiration on the contract. Additionally, Dow Jones industrial average futures plummet by 35 points and Nasdaq 100 futures were down 6.25 points.
Personal investing analysts are reassessing expectations regarding the central bank’s next policy move since last week when the central bank left interest rates unchanged and dropped language about possible rate increases.
