Stocks pull back after two-day rally


Stocks are poised to open lower today after rallying hard for two days.

S&P 500 futures are down by about 0.25 percent amid similarly modest declines in Europe. Most Asian markets climbed more than a 0.5 percent following yesterday's broad rally in U.S. markets. China continued to stand out with a gain of 1.7 percent after the country's service sector showed accelerating growth.

The S&P 500 is up more than 4 percent since Monday after politicians in Washington struck a deal to avert jarring tax hikes and spending cuts. It's now back to its highest levels since mid-October, which could make some traders expect a pause or pullback. Political battles remain in Washington, especially over the national debt ceiling in February.

Attention also focuses on economic data, with the ADP private-sector payroll report and initial jobless claims both scheduled for this morning. Challenger, Gray & Christmas already reported that planned layoffs fell to 32,556 last month from about 57,081 in November, which shows strength for the labor market.

Commodities and currencies are showing risk aversion as investors take profits. The euro is down strongly against the U.S. dollar, while the safe-haven Japanese yen is rallying across the board. Oil, copper, and silver fell by about 0.5 percent, and most agricultural foodstuffs are lower.

Monthly sales reports from retailers are being released today, and so far they look negative. Limited Brands, for instance, is down almost 4 percent after its results missed forecasts. Family Dollar is indicated lower by 8 percent after cutting profit guidance.

Among non-retail names moving in the pre-market, SunPower is up 19 percent after selling two photovoltaic power plants to MidAmerican Energy, a unit of Warren Buffett's Berkshire Hathaway. Mellanox Technologies fell 16 percent after issuing weak preliminary fourth-quarter results.

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