U.S. stocks looked set for a muted open on Wednesday as investors turned their attention to Europe, where Britain started a process to exit the European Union. Nine months after Britons voted to leave, British Prime Minister Theresa May notified EU Council President Donald Tusk in a letter that the UK is quitting the bloc it joined in 1973. The dollar rose on the Brexit development, building on gains from a day earlier, while prices of safe-haven gold also moved higher on uncertainty regarding trade policies between the EU and Britain.
“The big talk of the day is Britain’s official request to leave the EU, which we think, is likely to be a counter balance for the markets for many days to come,” Peter Cardillo, chief market economist, wrote in a note. Wall Street showcased an impressive recovery on Tuesday, with the Dow snapping an eight-day losing streak after robust consumer data pointed to the strength of the U.S. economy and eased jitters about the impact of a failed healthcare bill.
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“The markets are tranquil after yesterday’s new burst of confidence rally forced shorts to cover,” Cardillo wrote. A host of Federal Reserve officials, including Chicago Fed President Charles Evans and his Boston counterpart, Eric Rosengren, are scheduled to speak at separate events and could comment on interest rates. Dow e-minis were down 12 points, or 0.06 percent at 8:16 a.m. ET (1216 GMT), with 18,856 contracts changing hands.
S&P 500 e-minis were down 0.75 points, or 0.03 percent, with 113,567 contracts traded. Nasdaq 100 e-minis were up 2.75 points, or 0.05 percent, on volume of 18,939 contracts. Stocks moving premarket included Vertex Pharmaceuticals, which jumped nearly 18 percent to $105.65 after its cystic fibrosis treatment succeeded in a late-stage trial. Luxury furniture retailer RH soared 16.4 percent to $44.25 following a quarterly profit that beat analysts’ expectations. Chipmaker Exar Corp was up 22 percent at $12.95 following a deal to be bought by Maxlinear for about $700 million.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D’Silva)