- Pre-Market Indications

Wednesday, August 25, 2010

Indications: Stock futures edge down ahead of economic data

Stock Assault 2.0 - Artificial Intelligence Stock Market Software Alert Email Print

By Polya Lesova, MarketWatch

FRANKFURT (MarketWatch) -- U.S. stock futures slipped Wednesday, as upcoming reports on new-home sales and durable goods kept investors on edge with worries that the data will show more evidence of a slowdown in the economic recovery.

S&P 500 futures fell 2.20 points to 1,047.60, and Nasdaq 100 futures declined 5.75 points to 1,768.

Futures on the Dow Jones Industrial Average dropped 29 points to 9,994, breaking below the key 10,000 level.

"That big 10,000 level for the Dow will be closely watched, as a sustained break lower here could prove damaging psychologically, with traders on both sides of the Atlantic using it as another excuse to resume selling," said Ben Critchley, sales trader at IG Index in London.

News Hub: Dow slips back toward 10,000

The Dow posted another triple-digit loss today and at one point fell below the 10,000 level. Michael Casey has details about the factors driving today's market action.

The Dow /quotes/comstock/10w!i:dji/delayed (DJIA 10,040, -133.96, -1.32%) fell 1.3% Tuesday to end at 10,040.45, its lowest closing value since July 7. The index has dropped for four consecutive trading days.

Tuesday's steep decline came after data showed that sales of existing U.S. homes tumbled more than 27% in July, the largest one-month drop on record.

Wall Street is bracing for more economic data: July durable-goods orders will be released at 8:30 a.m. Eastern time, to be followed by July new-home sales at 10 a.m.

Joshua Raymond, market strategist at City Index, said that "investors are not willing to take on too much risk with important economic data coming in thick and fast."

Traders will focus on the new-home-sales data, which have "taken on added significance after yesterday's very poor existing-home sales and the profit warning issued by Irish firm CRH," Raymond said in a note to clients.

On the corporate front, home builder Toll Brothers Inc. /quotes/comstock/13*!tol/quotes/nls/tol (TOL 16.19, -0.01, -0.06%) swung to a fiscal third-quarter profit from a year-earlier loss.

In premarket trade, U.S.-listed shares of Allied Irish Banks /quotes/comstock/13*!aib/quotes/nls/aib (AIB 2.08, -0.06, -2.80%) dropped 4.8% and those of Bank of Ireland /quotes/comstock/13*!ire/quotes/nls/ire (IRE 3.86, -0.14, -3.50%) fell 2.6%. The losses came after Standard & Poor's downgraded Ireland's credit rating late Tuesday.

In Europe, equity markets posted losses, as concerns about the U.S. economy dominated, even as data showed an unexpected rebound in German business sentiment. The Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:SXXP 246.71, -2.74, -1.10%) fell 0.5% in intraday trading.


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Mining giant BHP Billiton /quotes/comstock/13*!bhp/quotes/nls/bhp (BHP 65.42, -1.71, -2.55%) /quotes/comstock/23s!a:blt (UK:BLT 1,767, -36.50, -2.02%) said its fiscal-year attributable net profit more than doubled to $12.72 billion, buoyed by strong sales volumes of iron ore, metallurgical coal and petroleum. Shares of the Anglo-Australian firm were little changed in London trading. Read more about BHP Billiton's results.

Shares of Heineken N.V. /quotes/comstock/24s!e:heia (NL:HEIA 35.02, +0.26, +0.75%) gained 0.8% in Amsterdam after the beer giant reported a 42% rise in first-half profit. See more on Heineken's results.

Shares of Tullow Oil /quotes/comstock/23s!e:tlw (UK:TLW 1,201, -96.00, -7.40%) fell 5.5% in London after the company said it could face delays in its Uganda projects.

Asian shares posted broad-based losses, with Japan's Nikkei Stock Average ending down 1.7% and China's Shanghai Composite dropping 2%.

In the currency markets, the dollar index /quotes/comstock/11j!i:dxy0 (DXY 83.32, +0.18, +0.21%) , which tracks the greenback's performance against a basket of other major currencies, gained 0.4% to 83.439.

The euro /quotes/comstock/21o!x:seurusd (EURUSD 1.2637, +0.0009, +0.0713%) fell 0.1% to $1.2622. It had gained earlier after Germany's Ifo business-sentiment index posted an unexpected rebound in August, rising to its highest level since June 2007. Read more about Germany's sentiment index.

Oil futures were little changed at $71.63 a barrel in electronic trading on Globex ahead of government data on U.S. petroleum inventories.

Gold futures gained $4.60 to $1,238 an ounce.

Polya Lesova is MarketWatch's London bureau chief.

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