Stock futures rebound, oil soars 3%

How to invest amid market selloff

Crossmark Global Investments CIO Bob Doll weighs in on where to put your money as major indexes decline.

U.S. equity futures were pointing to a rebound following a down session on Tuesday as the newest coronavirus variant sparked fears.

Wall Street's losses deepened after the head of the Federal Reserve said it will consider shutting off its support for financial markets sooner than expected.

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The major futures indexes suggested a gain of as much as 1% when the opening bell rings.

Oil prices rebounded Wednesday morning following steep losses on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures rose $2.36, or 3.5%, to $68.51 a barrel, after a 3.9% drop on Tuesday.

Brent crude futures gained $2.64, or 3.8%, to $71.87 a barrel, after a 5.4% slump on Tuesday.

Traders will examine a slew of economic reports.

The first of this week's labor-related reports will be ADP's release of  its National Employment report for November. Economists are looking for a gain of 525,000 private-sector jobs, down from a much stronger-than-expected increase of 571,000 in October.

The government's nonfarm payroll report for November will be released on Friday.

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Also on Wednesday, a big number to watch will be the ISM’s manufacturing purchasing managers index for November. It’s expected to edge higher to a reading of 61.0 from 60.8 in October. For context,  A number above 50 signals expansion.

One final report will be the latest on construction spending which is expected to increase 0.4% in October after slipping half a percent the previous month.

In Europe, London's FTSE added 1%, Germany's DAX and France's CAC were each up 0.9%.

In Asia, Japan's benchmark Nikkei 225 was up 0.4%, Hong Kong's Hang Seng gained 0.7% and China's Shanghai Composite added 0.4%.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES34483.72-652.22-1.86%
SP500S&P 5004567-88.27-1.90%
I:COMPNASDAQ COMPOSITE INDEX15537.690666-245.14-1.55%

On Wall Street, the S&P 500 fell 1.9%, erasing its gains from a day earlier. The sell-off accelerated after Fed Chair Jerome Powell told Congress the central bank may halt the billions of dollars of bond purchases it’s making every month "perhaps a few months sooner." It had been on pace to wrap up the purchases, meant to goose the economy by lowering rates for mortgages and other long-term loans, in June.

An end to the purchases would open the door for the Fed to raise short-term interest rates from their record low of nearly zero.

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Losses for stocks mounted quickly, with the drop for the Dow Jones Industrial Average more than tripling in half an hour as it sank 711 points. The blue chip index ended down 652.22 points, or 1.9%, at 34,483.72.

The Nasdaq composite held up slightly better than the rest of the market, shedding 245.14 points, or 1.6%, to 15,537.69. 

One signal in the bond market was also flashing some concern about the economy's prospects. Longer-term Treasuries usually offer higher yields than shorter-term Treasuries, in part to make up for the increased risk that future inflation may eat into their returns.

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A 10-year Treasury is still offering more in yield than a two-year Treasury, but the gap narrowed sharply on Tuesday. The two-year yield rose to 0.54% from 0.51% late Monday. The 10-year yield, meanwhile, fell to 1.45% from 1.52%.

The Associated Press contributed to this report.

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