U.S. stock futures weaken on Apple's outlook, economic fears - MarketWatch
LONDON (MarketWatch) -- U.S. stock futures pointed to another pullback on Wednesday, with expectations that Apple can't sustain its breakneck earnings growth weighing on technology issues in particular in a market gripped by recession fears.
With losses accelerating mid-morning, S&P 500 futures dropped 20.2 points to 1,289.10 and Nasdaq 100 futures fell 41 points to 1,760.00. Dow industrial futures fell 124 points.
On Tuesday, U.S. stocks ended lower, as an unplanned three-quarters of a percentage point interest-rate cut couldn't entirely diminish fears that the economy is headed for - or is actually in - a recession. The Dow industrials fell 128 points, the Nasdaq Composite dropped 47 points and the S&P 500 fell 14 points.
A potentially "severe" U.S. recession is on tap, said Nouriel Roubini, chairman of consulting firm Roubini Global Economics, at the Davos Economic Forum. See story.
Roubini was the only member of last year's World Economic Forum panel to predict a significant U.S. downturn as a result of what he called the "three bears" -- a credit crunch, a bursting housing bubble, and soaring energy prices.
Attention turns on Wednesday to the tech sector, as Apple (AAPL:![]()
, , ) reported a 58% fiscal first-quarter profit rise, but it steered the market to expect it will earn 94 cents a share in this quarter, well below analyst estimates of $1.09.
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"The company is lowballing the Street on the March quarter, but this is not a good environment to lowball the market," said Romeo Dator, who manages U.S. Global Investors All-American Equity Fund.
Apple shares dropped nearly 10% in Frankfurt trade.
There are a number of earnings releases for Wednesday, including drugs giant Pfizer (PFE:![]()
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Motorola (MOT:![]()
, , ) dropped 4% in Frankfurt after it forecast a loss from continuing operations in the first quarter and reported an 18% sales fall during the fourth quarter.
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Warren Buffett's Berkshire Hathaway (BRKB:![]()
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, , ) bought a 3% stake in the world's biggest reinsurer, Swiss Re, and agreed to manage 20% of its property and casualty business for five years.
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The economic calendar isn't so crowded, though in Europe, data showed slowing services sector growth, while the president of the European Central Bank delivered a speech suggesting the central bank was in no hurry to cut interest rates.
International stock markets were mixed. Asian stocks jumped on the Fed rate cut, particularly in Hong Kong, where its currency is pegged to the U.S. dollar.
The Hang Seng rose 10.7%, but in Europe, many markets were lower, with the German DAX 30 down 2.6%
Crude-oil futures fell $1.24 to $87.97 a barrel.
The U.S. dollar fell sharply against the Japanese yen, while the euro softened against the dollar. 
Steve Goldstein is MarketWatch's London bureau chief. 
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