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Dow, S&P futures inch higher as banks, energy stocks jump

(Reuters) – Futures tracking the Dow and the S&P 500 index edged higher on Monday, as investors pivoted towards economically sensitive sectors, with focus turning towards upcoming economic readings and ongoing talks over increased government spending.

FILE PHOTO: A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York City, U.S., September 17, 2019. REUTERS/Brendan McDermid

Oil majors Exxon Mobil and Chevron Corp rose 1.5% and 1.2% in premarket trade, respectively, tracking crude prices, while big lenders including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp gained about 0.8%. [O/R]

Industrials 3M Co and Caterpillar Inc, which tend to benefit the most from an economic rebound, also inched higher.

Market participants moved into value and cyclical stocks from tech-heavy growth names after the Federal Reserve last week indicated it could begin unwinding its bond-buying program by as soon as November, and may raise interest rates in 2022.

Though monetary tightening is frequently seen as a drag on stocks, some investors view the Fed’s stance as a vote of confidence in the U.S. economy.

The S&P 500 Value index is down 1.4% so far this month, but still outperforming its growth counterpart.

Wall Street ended a turbulent week with slight increases on Friday, although the benchmark S&P 500 index was on track to break its seven-month winning streak on concerns related to higher potential corporate taxes and China Evergrande’s default.

Investors will now watch for a raft of economic indicators, including durable goods orders and the ISM manufacturing index this week to gauge the pace of the recovery, as well as bipartisan talks over raising the $28.4 trillion debt ceiling.

The U.S. Congress faces a Sept. 30 deadline to prevent the second partial government shutdown in three years, while a vote on the $1 trillion bipartisan infrastructure bill is scheduled for Thursday.

At 6:38 a.m. ET, Dow e-minis were up 88 points, or 0.25%, S&P 500 e-minis were up 1.5 points, or 0.03%, and Nasdaq 100 e-minis were down 47 points, or 0.31%.

Mega-cap growth names Alphabet Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc and Apple Inc fell between 0.3% and 0.4%.

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