S&P 500 Futures Fall After Brussels Bombings; Travel Stocks Drop

S&P 500 Futures Fall After Brussels Bombings; Travel Stocks Drop
©2016 Bloomberg News
Manisha Jha

(Bloomberg) — U.S. stock futures fellafter three bombings in Brussels jolted markets and signaled an end to a four-day winning streak for the Standard & Poor’s 500 Index.

Carnival Corp., American Airlines Group Inc., Delta Air Lines Inc. and Expedia Inc. led travel-related stocks lower, falling at least 2.4 percent. Southwest Airlines Co. and Priceline Group Inc. also fell. Flights in and out of Brussels were canceled and security precautions were stepped up at travel hubs around Europe after the blasts at the Belgian capital’s airport and a subway station killed at least 26 people.

Contracts on the S&P 500 expiring in June retreated 0.4 percent to 2,035 at 9:06 a.m. in New York. Dow Jones Industrial Average futures lost 44 points, or 0.3 percent, to 17,484, a sign the gauge will snap seven straight days of gains, it’s longest streak of increases since October. West Texas Intermediate crude futures fell 0.6 percent, trimming an earlier slide by more than half.

“The attack is an external shock, and its impact on the rebound rally will depend on if it is followed by similar incidents,” said Christian Gattiker, head of research at Julius Baer Group Ltd. in Zurich. “It’s been a roller coaster in the first quarter.”

Declines today would interrupt a five-week rally bolstered by improving economic data, rising crude prices and optimism that central banks around the world will continue to support growth. The S&P 500 has erased the fallout from a tumultuous start to 2016, rebounding 12 percent since its February low and turning positive for the year last week. The index is among the top three best-performers this year among developed-market benchmarks tracked by Bloomberg.

Bank of America Corp. said today that clients were net sellers of $1.4 billion of U.S. stocks in an eighth consecutive week of selling, the longest client-selling streak in five years. That suggests investors still doubt the sustainability of the rally, strategists at the firm said.

The main U.S. equity gauge is heading toward the first monthly increase since November, which would halt the longest streak of declines since 2011. Worries over China’s slowdown and routs in oil and banks had dragged the S&P 500 last month to the lowest level since 2014.

The Chicago Board Options Exchange Volatility Index closed Monday at a seven-month low amid five days of declines, the most in a month. The measure of market turbulence known as the VIX is also on its way toward a sixth weekly retreat which would be the longest since 2008.

Equities haven’t declined since the Federal Reserve last week signaled a slower pace for interest-rate increases. Traders are pricing in a 41 percent probability for a boost to borrowing costs at the central bank’s June meeting, down from about 54 percent before the Fed released a revised economic outlook last Wednesday. Chicago Fed President Charles Evans is scheduled to speak this afternoon.

To contact the reporter on this story: Manisha Jha in London at mjha13@bloomberg.net To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net John Shipman, Trista Kelley



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