S&P 500 futures advance as markets seek floor to global selloff

HONG KONG – Investors are betting on another turnaround in U.S. stocks as shares from Asia to Europe struggle to gain ground amid the worst global equity rout in almost four years.

Futures rose after a rally in Standard & Poor’s 500 Index evaporated in the last hour of trading on Tuesday. The contracts extended gains and Treasuries dropped after durable goods orders climbed the most in a year. European stocks fell and copper led commodities lower after China’s efforts to shore up its economy failed to halt a selloff in local stocks.

“We’ll have more volatility until we get more visibility,” said Jacques Porta, who helps oversee the equivalent of $570 million as a fund manager at Ofi Gestion Privee in Paris. “The Chinese devaluation worried investors and the economic data has struggled. The potential rate increase in the U.S. also gives worry that worldwide economic growth will slow.”

Concern that Chinese policy makers may fail to prevent a hard landing in the world’s second-largest economy has convulsed global markets, triggering a rush from all but the safest of assets. About $8 trillion has been erased from the value of global equities since China’s surprise devaluation of the yuan on Aug. 11 as investors weighed prospects for slowing growth and the first interest-rate increase in the U.S. in almost a decade.

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S&P 500 futures climbed 2.4 percent at 8:35 a.m. in New York. U.S. stocks fell 1.4 percent yesterday after gaining as much as 2.9 percent. The yield on 10-year Treasuries rose seven basis points to 2.15 percent.

Bookings for non-military equipment excluding planes climbed 2.2 percent, the most since June 2014, after increasing 1.4 percent in June, data from the Commerce Department showed Wednesday in Washington. Orders for all durable goods – items meant to last at least three years – rose 2 percent, exceeding all forecasts of economists surveyed by Bloomberg.

Cameron jumped 44 percent in early trading. Schlumberger Ltd., the world’s largest oilfield-services provider, agreed to buy Cameron for $66.36 a share in a deal valued at $14.8 billion. Stockholders will receive 0.716 Schlumberger shares and a cash payment of $14.44 in exchange for each Cameron share, according to a regulatory statement on Wednesday.

The Stoxx Europe 600 Index dropped 0.5 percent, paring earlier declines of as much as 2.7 percent. Copper slid 2.3 percent and the Bloomberg Commodity Index declined 0.3 percent.

The Shanghai Composite swung during the day, sliding as much as 3.9 percent, then rallying, before closing down 1.3 percent. Hong Kong’s Hang Seng China Enterprises Index also erased earlier gains, falling 0.9 percent.

Chinese equities have lost half their value since mid-June, as margin traders closed out bullish bets. The government has halted intervention in the equity market this week as policy makers debate the merits of an unprecedented rescue, according to people familiar with the situation.

Futures on the S&P 500 tracked the gyrations in China, rising as much as 1.7 percent before paring gains. The 120-day correlation between the contracts and the movement of China’s benchmark stock gauge climbed to a record.

“The struggle between gains and losses suggests that the market doesn’t really know what to make of the policy move yet,” said Bernard Aw, a strategist at IG Asia Pte Ltd. in Singapore. “There might be a chance we could see some consolidation in the markets before investors are confident enough to push higher. This view holds barring any other shocks, such as a Fed rate hike in September.”

The MSCI Emerging Markets Index slipped 0.2 percent, after rallying 2.2 percent on Tuesday, the most in two years. Equity gauges in India, and Saudi Arabia and South Africa lost more than 1 percent. Russia’s ruble and Malaysia’s ringgit both declined 1.2 percent.

South Korea’s Kospi jumped 2.6 percent, capping the biggest two-day rally since June 2013, as tensions between North and South Korea eased. Hyundai Merchant Marine Co., which has operations in North Korea, jumped 23 percent. The won strengthened 0.8 percent.

Industrial metals declined, with nickel sliding 1 percent and zinc losing 1.8 percent. Gold failed to hold early gains, dropping 0.9 percent to $1,130.28 an ounce. Silver declined 0.8 percent.

West Texas Intermediate rose 0.8 percent to $39.62 a barrel, having earlier risen as much as 1.2 percent. Brent crude traded at $43.47.

The euro slid 1 percent to $1.1405, and the yield on Germany’s 10-year securities fell one basis point to 0.72 percent.

The cost of insuring corporate debt rose for the sixth time in seven days. The Markit iTraxx Europe Index, which tracks credit-default swaps on investment-grade companies, climbed two basis points to 75 basis points. The Markit iTraxx Europe Crossover Index, a measure of non-investment grade CDS, climbed five basis points to 349 basis points.

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