Futures Fall Further After Economic News
Futures added to losses Wednesday following a weaker-than-expected Empire state manufacturing survey and amid worries over a new aid for Greece resurfaced after the euro zone finance ministers failed to forge a deal.
Euro zone ministers will meet again next week to find an agreement, with the voluntary involvement of private investors the main sticking point.
On the economic front, the consumer price index rose 0.2 percent in May, down from April's 0.4 recent increase, according to the Labor Department. Food costs rose 0.4 percent, while energy costs fell 1 percent, the first drop in almost a year.
Meanwhile, a gauge of manufacturing in New York State showed the sector unexpectedly contracted in June, falling to minus 7.79 for the first time since November 2010 from positive 11.88 in the month before, in another sign the economic slowdown could become more protracted, according to the New York Federal Reserve. Economists polled by Reuters had expected a gain to 12.50.
“Futures are concentrating more on the Empire state survey,” said Bill Hampel, chief economist at the Credit Union National Association.
“Given that the overall momentum has been positive—anemic, but positive—the pause that we’re seeing is more likely from the supply chain interruptions from Japan, as opposed to the reversal in the momentum in the economy.”
In addition, Hampel said while Greece’s crisis is also pressuring stocks, he eventually expects a resolution for the debt-ridden nation.
Traders were turning to the U.S. dollar as a safe haven, boosting the greenback against a basket of global currencies. Oil prices declinedamid the rising dollar and as doubts grew over the outlook for fuel demand. U.S. light, sweet crude slipped below $99 a barrel, while London Brent crude fell to near $118. Weekly crude inventories is scheduled to reported at 10:30 am ET.
Nokia shares tumbled in premarket trading, giving back most the gains the company realized Tuesday on news that it had settled long-standing patent disputes with Apple.
JC Penney backtracked after rallying Tuesday after an announcement that it had hired former Apple executive Ron Johnson to take over as CEO of the department store chain.
Carnival was also under pressure after Nomura cut its price target on the cruise line leader.
On the IPO front, Internet-radio company Pandorapriced its IPO at $16 a share, much higher than expected, putting its market cap at $2.6 billion. Shares are expected to make its debut under the ticker symbol "P".
Industrial capacity and utilization data is due at 9:15 am ET. Joe Biden meets top lawmakers at 9 am ET to continue discussions to find an agreement to raise the debt ceiling.
In other economic news, the Mortgage Bankers Association said refinancing requests pushed home loan applications to their highest level in three months.
Federal Reserve chairman Ben Bernanke warned on Tuesday that a failure to lift the government's $14.3 trillion debt ceiling risks a potentially disastrous loss of confidence in America's creditworthiness.
European stocks slippedamid renewed concerns over Greece's debt crisis and contagion fears.
On Tap This Week:
WEDNESDAY: CPI, Empire state mfg survey, Treasury international capital, industrial production, housing market index, Geithner testifies before House Financial Services, oil inventories, credit card default rates reported, Dell shareholder mtg
THURSDAY: Housing sales, jobless claims, current account, Philadelphia Fed survey, Fed's Fisher speaks, money supply; earnings from Kroger, Pier 1 Imports, Smithfield Foods, Research In Motion
FRIDAY: Consumer sentiment, leading indicators, quadruple witching
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