(This story has been posted on The Wall Street Journal Online's Market Beat blog at http://blogs.wsj.com/marketbeat.)
By Steven Russolillo
Pre-Market Brief:
MARKET SNAP: At 5:52 a.m. ET, S&P 500 futures down 0.2%. Treasury yields lower. Nymex down at $91.77; gold down 0.6% at $1,570.20. In Europe, FTSE 100 down 0.4%, DAX down 0.8% and CAC 40 down 1.1%. In Asia, Nikkei 225 up 0.4% and Hang Seng down 0.6%.
Overnight action: Lloyds CEO links bonus to stake sale; Cameron dealt blow in local election; Hungarian central bank pick raises questions.
Watch for: January personal income (8:30 a.m. Eastern Time): seen: -2.3%; last: +2.6%. January consumer spending (8:30): seen: +0.2%; last: +0.2%. February Reuters/Univ of Mich consumer sentiment (final) (9:55): seen: 76.3; last: 76.3 (preliminary). February ISM manufacturing PMI (10:00): seen: 52.5; last: 53.1. January construction spending (10:00): seen: +0.5%; last: +0.9%. February Vehicle sales: seen: 15.1 million; last: 15.2 million. Best Buy Foster Wheeler, Liberty Mutual and Pepco are among companies scheduled to report quarterly results.
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The Breakfast Briefing
With the Dow's record high seemingly coming any day now, the inevitable question facing investors: What's next?
Stocks burst out of the gate in January and added to gains last month, leaving the Dow up 7.3% this year. At one moment yesterday, the blue-chip index came within 15 points of reclaiming its all-time high hit on Oct. 9, 2007.
But the push toward record levels has been accompanied recently by bigger- than-usual daily price swings stemming from increased political turmoil in the U.S. and Europe. The Dow has notched a triple-digit-point swing in five of the last seven trading days.
In a chat with MarketBeat, Seth Setrakian, co-head of domestic equities at First New York Securities, a brokerage firm, said the volatility stemming from Italy's elections Monday shouldn't be taken lightly. That day's selloff brought back memories of 2011 and 2012, he said, when the euro crisis was whipping markets around on a daily basis.
Mr. Setrakian said he expects markets will become choppier as Europe becomes more of a focus, again."Right now I feel the euro is the driver of the market," he said. "My eyes are on that first thing in the morning."
On Thursday, a weaker euro weighed on stocks. The Dow rose as much as 74 points before slumping in the final trading hour and finishing down 21 points. Tweaks and rebalancings to some of the major indexes also added some sizzle to the action.
Europe won't be alone in weighing on the markets. In Washington, the $85 billion in so-called sequester cuts take effect Friday if, as expected, President Obama and congressional leaders find no way to avoid them.
That means stocks might be setting up for a repeat of the past three years, when the Dow's rally to start those year petered out in the spring and summer months before regaining traction later on.
Just a few things to keep an eye on as the financial media remain fixated on the Dow's march back toward all-time highs.
Morning MarketBeat Daily Factoid: On this day in 1961, the Peace Corps was officially established.
- Steven Russolillo
-- Morning MarketBeat: Record Highs So Close, Yet So Far -- Morning MarketBeat: Bernanke Soothes, For Now -- Morning MarketBeat: Europe Rears Ugly Head -- Morning MarketBeat: Stocks Set for Correction? Think Again -- Morning MarketBeat: Stocks Hit First Pothole of Year
Stocks to Watch
Groupon is likely to attract attention from investors after it said late Thursday that it is replacing Chief Executive Andrew Mason. Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis will serve as interim leaders
