By William L. Watts, MarketWatch
LONDON (MarketWatch) — U.S. stock futures lost ground Thursday, pointing to a lower open for Wall Street as investors digested a weaker sales forecast for networking-equipment heavyweight Cisco Systems Inc. and a stronger-than-expected rise in Chinese inflation.
Futures on the Dow Jones Industrial Average (DJZ10 11,286, -16.00, -0.14%) were down 13 points at 11,290, while S&P 500 futures (SPZ10 1,211, -2.80, -0.23%) fell 2.4 points to 1,211.7.
Cisco’s (CSCO 24.49, +0.14, +0.57%) lackluster outlook is likely to put some pressure on the tech sector, said Michael Hewson, strategist at CMC Markets, while a 4.4% jump in China’s consumer-price index in October underlines fears of a fiscal tightening by Beijing. Read about China's inflation jump
Economists had forecast a 4% rise after a 3.6% jump in inflation in September.
Together, the factors will combine to diminish risk appetite, Hewson said. Investors are also keeping a close eye on ongoing sovereign-debt woes in the euro zone, which have weighed on the European banking sector and could eventually put some pressure on the U.S. financial sector as well, he said.
Cisco, after Wednesday’s close, reported an 8% rise in profit, but offered a weaker-than-expected sales outlook. Read about Cisco's results
The results were a sobering surprise for many analysts and investors, particularly in light of the company’s bellwether status for the network-hardware industry.
Retailer Kohl’s Corp. (KSS 52.26, -0.03, -0.06%) late Wednesday reported third-quarter profit of 63 cents a share, matching the figure from a year ago and topping the consensus estimate produced by a FactSet Research survey of analysts by one cent. Koh’ls forecast fourth-quarter earnings of $1.51 to $1.59 a share, versus a consensus forecast of $1.57, and said it intends to accelerate a portion of its share buyback plan.
The Dow Jones Industrial Average (DJIA 11,357, +10.29, +0.09%) on Wednesday eked out a gain of 10.29 points to close at 11,357.04. The S&P 500 (SPX 1,219, +5.31, +0.44%) rose 5.31 points to 1,218.71, while the Nasdaq Composite (COMP 2,579, +15.80, +0.62%) added 15.8 points to settle at 2,578.78.
European stock markets were mostly higher, boosted by strong results from European blue-chip companies. Among the movers, shares in German industrial giant Siemens AG (DE:SIE 85.72, +1.76, +2.10%) (SI 114.91, -1.73, -1.48%) were up more than 2% in Frankfurt after the firm raised its dividend and outlined a new dividend policy. Read more about Siemens
The U.S. dollar was mostly higher versus major rivals, while the euro (EURUSD 1.3750, -0.0031, -0.2250%) lost 0.2% versus the greenback to trade at $1.3758 as worries about Ireland’s fiscal picture contributed to further pressure on peripheral euro-zone bonds.
Gold futures were up $14.80 at $1,414.10 an ounce in electronic trade, while Nymex crude-oil futures rose 68 cents to trade at $88.49 a barrel.
