U.S. jobless claims, existing-home-sales reports due
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) — U.S. stock futures fell Thursday after a survey of purchasing managers pointed to a sharp slowdown in euro-zone growth, rekindling economic worries and prompting traders to sell equities.
Futures on the Dow Jones Industrial Average (DJZ10 10,622, -51.00, -0.48%) dropped 57 points to 10,616 and S&P 500 futures (SPZ10 1,122, -7.50, -0.66%) slipped 7.80 points to 1,122.
Stocks on Wall Street finished lower on Wednesday; the blue-chip Dow index (DJIA 10,739, -21.72, -0.20%) fell 0.2%.
“The markets are susceptible to some disappointment in the economic news flow and we did get a little bit from Europe in terms of the PMI survey,” said Mike Lenhoff, chief strategist at Brewin Dolphin in London.
“The talk about quantitative-easing two is not really helping as well,” he said, referring to growing expectations that the Federal Reserve may implement further quantitative-easing measures. “What they [the Fed] are acknowledging is that there is a risk still to the recovery.”
In Europe, the Markit euro-zone composite output index fell from 56.2 in August to 53.8 in September, posting the largest decline since November 2008. See story on euro-zone PMI data
A reading above 50 indicates growth in activity, but the data also signaled that euro-zone growth slowed sharply at the end of the third quarter.
European stock markets turned lower following the data, with the Stoxx Europe 600 index (ST:SXXP 259.87, -1.32, -0.51%) falling 0.5%. See Europe Markets
“Technically, some of these markets were looking overbought,” Lenhoff said. “The figures provided the excuse to take profits.”
Investors are now bracing for a string of U.S. data. Weekly jobless claims will be released at 8:30 a.m. Eastern time, to be followed by leading indicators and existing-home sales for August at 10 a.m. Eastern.
Meanwhile, sovereign-debt worries resurfaced in Europe, with the cost of insuring government debt against default once again soaring, particularly for Ireland, Spain, Portugal and Greece.
Data showed that Ireland’s economy contracted by 1.2% in the second quarter from the preceding three months, highlighting the depth of the nation’s economic crisis. See Irish GDP story
On the corporate front, fast-food giant McDonald’s Corp. (MCD 75.05, -0.08, -0.11%) announced it will raise its quarterly cash dividend by 11% to 61 cents a share.
Shares of Bed Bath & Beyond Inc. (BBBY 44.10, +2.05, +4.88%) rose 4.4% in premarket trading after the company reported increases in quarterly profit and revenue.
Red Hat Inc. (RHT 38.70, +1.95, +5.31%) gained 6% after the provider of open-source services reported a 20% increase in quarterly revenue.
Blockbuster Inc. (BLOKA 0.06, -0.03, -31.25%) (BLOKB 0.03, -0.03, -51.61%) said it has initiated Chapter 11 bankruptcy proceedings as part of a plan to recapitalize the company.
Gold futures were little changed at $1,292.80 an ounce, taking a break from their recent record-shattering run.
The dollar recovered some ground against major rivals, with the dollar index (DXY 80.07, +0.24, +0.30%) trading up 0.2% to 80.017.
