MarketWatch.com - Pre-Market Indications

Thursday, August 26, 2010

Indications: U.S. stock futures point to opening slide

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By Polya Lesova and Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures pointed to opening losses Wednesday as yet another economic report illustrated a slowing economic recovery.

Futures remained lower after the government said U.S. durable-goods orders rebounded only 0.3% in July, well below expectations. Read more about durable goods.

"It's another clear reflection of the softness of the U.S. economy. Orders for things that last three years or more fell off the cliff in the month of July. We'll have to figure how much is priced in with the carnage we've already done to the three major indexes," said Art Hogan, chief market strategist at Jefferies & Co.

"And, we might be able to fuel the flames for the sellers even more after the market opens," Hogan added, referring to new-home-sales data expected shortly after the open.

S&P 500 futures fell 6.6 points to 1,043.2, and Nasdaq 100 futures declined 13.75 points to 1,760.

Futures on the Dow Jones Industrial Average dropped 54 points to 9,969.

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 10,060, +19.61, +0.20%) 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.

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."

On the corporate front, home builder Toll Brothers Inc. /quotes/comstock/13*!tol/quotes/nls/tol (TOL 17.13, +0.94, +5.81%) swung to a fiscal third-quarter profit from a year-earlier loss. Read more about Toll's results.

In premarket trade, U.S.-listed shares of Allied Irish Banks /quotes/comstock/13*!aib/quotes/nls/aib (AIB 1.99, -0.09, -4.33%) and Bank of Ireland /quotes/comstock/13*!ire/quotes/nls/ire (IRE 3.90, +0.04, +1.04%) fell. 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 247.54, -1.91, -0.77%) fell 0.5% in intraday trading.

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Mining giant BHP Billiton /quotes/comstock/13*!bhp/quotes/nls/bhp (BHP 65.51, +0.09, +0.14%) /quotes/comstock/23s!a:blt (UK:BLT 1,767, 0.00, 0.00%) 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 35.20, 0.00, 0.00%) gained 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 1,238, 0.00, 0.00%) fell after the company said it could face delays in its Uganda projects. Read more about Tullow Oil's results.

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 82.92, -0.34, -0.41%) , which tracks the greenback's performance against a basket of other major currencies, gained 0.2% to 83.32.

The euro /quotes/comstock/21o!x:seurusd (EURUSD 1.2715, +0.0055, +0.4344%) fell less than 0.1% to $1.2639. 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 $71.26 a barrel in electronic trading on Globex ahead of government data on U.S. petroleum inventories.

Gold futures gained $4.10 to $1,237.5 an ounce.

Polya Lesova is MarketWatch's London bureau chief. Kate Gibson is a reporter for MarketWatch, based in New York.

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