By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — U.S. stock futures slumped on Thursday, as fears over global growth prospects and Europe’s ongoing sovereign-debt woes weighed on equity markets around the world.
Futures on the Dow Jones Industrial Average DJ1U -1.71% fell 173 points to stand at 11,208. Standard & Poor’s 500 index futures SP1U -1.93% dropped 21.2 points to 1,168.70, while Nasdaq 100 futures ND1U -2.17% lost 43.25 points to trade at 2,132.
After bouncing back last week on the heels of short-selling bans in Europe, equities have seen renewed pressure on concerns about slowing global growth and that European leaders haven’t yet managed to fence in the euro zone’s sovereign problems, said Michael Hewson, market analyst at CMC Markets in London.
While it’s difficult to pinpoint a single catalyst behind the current bout of selling pressure, the weakness appears in part to be a delayed reaction to the failure of German Chancellor Angela Merkel and French President Nicolas Sarkozy to come up with concrete proposals to address the region’s debt problems at a meeting earlier this week, he said.
“I think the realization is that [officials] don’t really have a clue,” Hewson said.
As a result, investors appear to be rotating out of cyclical equities into safe havens, such as gold, he said.
The Wall Street Journal on Thursday reported that the Federal Reserve and state regulators are intensifying their oversight of U.S. subsidiaries of Europe’s biggest banks to measure how vulnerable the divisions are to increased financial pressures. Officials are worried the euro-zone’s debt crisis could impair the banks’ ability to fund loans and meet other obligations in the United States.
The latest round of data on first-time claims for U.S. unemployment benefits are set for release at 8:30 a.m. Eastern time. Economists surveyed by MarketWatch expect initial claims to rise to 400,000 from 395,000 the previous week.
Also at 8:30 a.m., the Labor Department will release data on consumer inflation, with economists forecasting a July increase in the consumer price index of 0.4%. The core rate, which excludes food and energy, is expected to show a 0.2% increase.
Shares likely to be in the spotlight Thursday include NetApp Inc. NTAP -13.47% , which reported a first-quarter profit after Wednesday’s close that fell short of forecasts. JDS Uniphase Corp. JDSU -1.76% late Wednesday issued a lower-than-expected outlook for revenues.
Sears Holdings Corp. SHLD -2.64% , parent of the Sears and K-Mart department-store chains, on Thursday said its second-quarter loss widened on a 1.2% drop in sales.
Foods and coffee company J.M. Smucker Co. SJM +0.89% topped Wall Street forecasts with an adjusted first-quarter profit of $1.12 a share versus $1.04 a share in the same period a year ago and affirmed its full-year fiscal 2012 forecast.
After Thursday’s close, investors will take a close look at results from computer maker Hewlett-Packard Co. HPQ -2.26% , particularly after a disappointing outlook from rival Dell Inc. DELL -2.47% was credited with pressuring stocks on Wednesday.
European stocks saw heavy pressure, tracking losses in Asian markets amid worries over stalling global growth. Read Europe Markets.
Japan’s Nikkei Stock Average JP:NIK -1.25% fell 1.3% to close at its lowest level since March 15. Read Asia Markets.
Nymex crude-oil futures CL1U -2.07% dropped $1.75 to trade at $85.83 a barrel in electronic trading Thursday, while gold futures GC1Z +0.95% rose $16.50 to stand at $1,810.30 an ounce.
Wall Street saw a mixed finish on Wednesday, with the S&P 500 SPX +0.09% and the Dow industrials DJIA +0.04% posting mild gains, while Dell’s travails contributed to a negative finish for the Nasdaq Composite Index COMP -0.47% .
