Stock futures rise at the start of September trading, Dow futures gain 100 points

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Traders operate on the floor of the New York Stock Exchange (NYSE) on August 3, 2021.

Michael Nagel | Bloomberg | Getty Images

US stock futures were higher in early morning trading Wednesday after the S&P 500 posted a seven-month profit streak in August.

The Dow Jones Industrial Average futures rose 101 points, or 0.3%. S&P 500 futures gained 0.3% and Nasdaq 100 futures gained 0.2%.

The most important averages all finished higher in August. The S&P 500 gained 2.9% for the month, its best streak since 2017. The Nasdaq Composite gained about 4% in its third positive month and while the Dow lagged it was still up 1.2% .

Cyclical stocks tied to the reopening of the economy gained in pre-trading on Wednesday. Casino stocks were higher, led by Las Vegas Sands. Exxon Mobil led a surge in energy stocks.

Bank stocks, led by Citigroup and Bank of America, rose roughly 1% each pre-IPO. The financial sector led the market in August, up 5%.

“We are maintaining a risk-taking stance and position in stocks that should benefit from strong economic growth and a reopening,” UBS’s wealth strategists wrote in a statement on Wednesday.

Solar stock Sunrun gained 2% in pre-trading hours after JPMorgan forecast a comeback that would send the stock up 90%.

Zoom Video stocks rebounded in early trading after falling 16% on Tuesday after Cathie Wood announced that it had bought nearly 200,000 shares in the downturn.

The ADP National Employment Report, due out Wednesday at 8:15 a.m. ET, will show the increase of 600,000 private sector jobs in August, according to economists polled by Dow Jones. The report is a precursor to the official U.S. payroll data for August outside of agriculture, which will be released on Friday. Economists polled by Dow Jones estimate that 720,000 jobs were created in August and the unemployment rate has fallen to 5.2%.

Despite internal rotations from reopening from stocks to technology and back again, the S&P 500 has had a fairly smooth ride so far in 2021, up more than 20% without seeing a 5% decline. The benchmark closed 296 consecutive days above its 200-day moving average, a measure of long-term trend.

With this in mind, some strategists are on the lookout for a correction in September as stocks haven’t seen a significant correction since last October combined with the eagerly anticipated Federal Reserve Bank meeting in September and ongoing concerns about the Delta-Covid variant.

“While that bull market laughed at almost all of the worrying signs in 2021, let’s not forget that September is historically the worst month of the year for stocks,” said Ryan Detrick, LPL Financial’s chief market strategist. “Even last year, in the face of a huge rally from the March 2020 lows, we saw a correction of nearly 10% in mid-September.”

He added that any weakness could be short-term and could be in the 5 to 8% range.

“This bull market is alive and well and we would see any potential weakness as an opportunity,” he said.

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