* Dow and S&P 500 coming off seven weeks of gains
* Oil falls after Iran deal, energy shares may be pressured
* FDA approves Johnson & Johnson's hepatitis C drug
* Futures up: Dow 58 pts, S&P 5.6 pts, Nasdaq 11 pts
By Ryan Vlastelica
NEW YORK, Nov 25 U.S. stock index futures rose
on Monday, suggesting major averages would extend a rally that
has taken them to repeated all-time highs, though energy shares
will be in focus amid a sharp decline in crude oil prices.
Trading is expected to be light this week, with markets
closed Thursday for Thanksgiving, and closing early on Friday.
The light action could increase market volatility. The CBOE
Volatility index is down more than 30 percent this year,
and is at historically low levels, which could make it
vulnerable to a spike.
The Dow Jones industrial average and S&P 500 have rallied in
recent months, closing out their seventh straight week of gains
last week. Both indexes closed at records on Friday, with the
S&P closing above 1,800 for the first time.
The gains have largely come on expectations that the U.S.
Federal Reserve will maintain its stimulus program through the
year-end. While the program is expected to provide a floor under
equity prices for as long as it continues, the scale of the
rally has some investors looking for a pullback amid few
catalysts. The S&P is 1.4 percent above its 14-day moving
average, which could serve as support in a correction.
"It won't take much for these gains to fade given the rally
we've seen, especially in such a slow week," said Jeff Duncan,
chief executive of Duncan Financial Management in St. Louis.
"The Fed is holding steady, but a lot of investors have become
complacent, buying for no real fundamental reason."
U.S. crude futures fell 1.3 percent after a
breakthrough nuclear deal between world powers and Iran over the
weekend eased oil supply fears. Brent crude fell 1.6
The decline in the price of oil could weigh on energy
companies, though it may benefit other segments of the economy,
like consumer spending. U.S. shares of BP Plc fell 0.6
percent in premarket trading.
"Less tension in the Middle East is always a positive, and
any drop in gas prices will essentially act as a tax break for
consumers going into the holiday shopping season," Duncan said.
"This is a real benefit for the economy."
S&P 500 futures rose 5.6 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures added 58
points and Nasdaq 100 futures rose 11 points.
Wall Street's rally comes just ahead of December, which has
been the best month for both the Dow and the S&P since 1950. If
the trend continues, it would add to the S&P's 26.5 percent jump
so far in 2013, the best year for the index since 1998.
In company news, the Food and Drug Administration on Friday
approved the use of Johnson & Johnson's Olysio as a
treatment for the hepatitis C virus. Shares of the Dow component
added 25 cents in light premarket trading.
Hewlett-Packard Co investors have grown concerned
about a possible slowdown in Chinese demand, which previously
has hit tech giants IBM and Cisco Systems Inc.
Dow component Boeing Co late Friday advised airlines
about a risk of engine-icing problems on its new 747-8 and 787
Dreamliner planes with engines made by General Electric ;
it urged 15 carriers to avoid flying them near high-level