Investing.com - U.S. stock futures pointed to a flat open on Wednesday, pausing a day after rallying to multi-year highs, as shares in Citigroup came under pressure following the release of stress test results of the largest U.S. lenders.
Ahead of the open, the Dow Jones Industrial Average futures pointed to a modest gain of 0.05%, S&P 500 futures signaled a 0.05% decline, while the Nasdaq 100 futures indicated a 0.1% drop.
Stocks soared on Tuesday, with the Nasdaq composite closing above 3,000 for the first time since December 2000, during the dot-com boom. The Dow settled at the highest level since December 2007, while the S&P closed at its highest level since June 5, 2008.
The upbeat mood carried over to the Asian and European sessions on Wednesday after the Federal Reserve said it saw signs of an improving economy and expected the unemployment rate to keep falling. The Fed also said strains in the global financial markets have eased.
Shares in lenders were expected to be in focus after the Fed made a surprise announcement of the results of its annual stress test for banks late Tuesday.
According to the results, JP Morgan Chase and 14 other financial institutions could maintain adequate capital levels even in a recession scenario, while continuing to pay dividends and buy back stock. Four, including Citigroup, failed.
Citigroup shares dropped 3.4% after the Fed said the bank would have to resubmit their capital plans to the central bank.
The three other lenders that failed were, Ally Financial, MetLife and SunTrust Banks. MetLife was down 3.5% ahead of the open, while SunTrust fell 3.6%.
The Fed had planned to release the results on Thursday afternoon. But it moved up the announcement after JP Morgan declared its dividend increase. The bank said it had the Fed's blessing to raise the dividend.
Meanwhile, shares in Cheniere Energy slumped 4.1% after announcing it will sell 17 million shares of common stock in an underwritten public offering.
Shares in social media website Zynga retreated 1.5% after reports surfaced that it was planning a secondary stock offering, with a filing possibly coming as early as Wednesday.
Across the Atlantic, European stock markets were broadly higher, with indices extending gains after euro zone finance ministers formally approved a second bailout for Greece.
The EURO STOXX 50 rallied 1.2%, France’s CAC 40 jumped 0.8%, Germany's DAX surged 1.15%, while Britain's FTSE 100 added 0.35%.
During the Asian trading session, Hong Kong's Hang Seng Index dipped 0.15%, while Japan’s Nikkei 225 Index soared 1.55% to settle at above 10,000 for the first time since July.
Shares in Hong Kong, however, turned lower, erasing gains of as much as 1.1% after Chinese Premier Wen Jiabao dampened expectations of any near-term easing of measures in the property sector.
Wen said loosening property controls risks “chaos in China’s housing sector” and warned of damage to the economy if a bubble were allowed to develop.
Later in the day, the U.S. was to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles. In addition, Federal Reserve Chairman Ben Bernanke was also due to speak.
Ahead of the open, the Dow Jones Industrial Average futures pointed to a modest gain of 0.05%, S&P 500 futures signaled a 0.05% decline, while the Nasdaq 100 futures indicated a 0.1% drop.
Stocks soared on Tuesday, with the Nasdaq composite closing above 3,000 for the first time since December 2000, during the dot-com boom. The Dow settled at the highest level since December 2007, while the S&P closed at its highest level since June 5, 2008.
The upbeat mood carried over to the Asian and European sessions on Wednesday after the Federal Reserve said it saw signs of an improving economy and expected the unemployment rate to keep falling. The Fed also said strains in the global financial markets have eased.
Shares in lenders were expected to be in focus after the Fed made a surprise announcement of the results of its annual stress test for banks late Tuesday.
According to the results, JP Morgan Chase and 14 other financial institutions could maintain adequate capital levels even in a recession scenario, while continuing to pay dividends and buy back stock. Four, including Citigroup, failed.
Citigroup shares dropped 3.4% after the Fed said the bank would have to resubmit their capital plans to the central bank.
The three other lenders that failed were, Ally Financial, MetLife and SunTrust Banks. MetLife was down 3.5% ahead of the open, while SunTrust fell 3.6%.
The Fed had planned to release the results on Thursday afternoon. But it moved up the announcement after JP Morgan declared its dividend increase. The bank said it had the Fed's blessing to raise the dividend.
Meanwhile, shares in Cheniere Energy slumped 4.1% after announcing it will sell 17 million shares of common stock in an underwritten public offering.
Shares in social media website Zynga retreated 1.5% after reports surfaced that it was planning a secondary stock offering, with a filing possibly coming as early as Wednesday.
Across the Atlantic, European stock markets were broadly higher, with indices extending gains after euro zone finance ministers formally approved a second bailout for Greece.
The EURO STOXX 50 rallied 1.2%, France’s CAC 40 jumped 0.8%, Germany's DAX surged 1.15%, while Britain's FTSE 100 added 0.35%.
During the Asian trading session, Hong Kong's Hang Seng Index dipped 0.15%, while Japan’s Nikkei 225 Index soared 1.55% to settle at above 10,000 for the first time since July.
Shares in Hong Kong, however, turned lower, erasing gains of as much as 1.1% after Chinese Premier Wen Jiabao dampened expectations of any near-term easing of measures in the property sector.
Wen said loosening property controls risks “chaos in China’s housing sector” and warned of damage to the economy if a bubble were allowed to develop.
Later in the day, the U.S. was to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles. In addition, Federal Reserve Chairman Ben Bernanke was also due to speak.