MW: U.S. stock futures drop after Alcoa production cut
Caution from metals giant Alcoa helped drag U.S. stock futures lower on Wednesday as an up-and-down week continued.
S&P 500 futures dropped 6.4 points to 924.10 and Nasdaq 100 futures lost 4.75 points to 1,266.20. Dow industrial futures slipped 64 points.
"Alcoa's production and job cuts announcement came out after the bell last night and that is set to weigh down the market today, in addition to some general edginess ahead of the ADP private sector payrolls report," said Martin Slaney, head of derivatives at London-based GFT.
U.S. stocks closed higher Tuesday as President-elect Obama stumped for his recovery plan on Capitol Hill, even as minutes from the December Open Market Committee meeting offered a bleak view of the economy. The Dow industrials rose 62 points, the Nasdaq Composite rose 24 points and the S&P 500 added 7 points.
Wednesday's session will feature ADP's estimate of December payrolls, two days ahead of the government report, and weekly energy inventories data. In addition, Kansas City Fed President Thomas Hoenig will be discussing the economic outlook.
The euro recovered some of Tuesday's losses, with the shared currency hovering around $1.36.
Oil futures, meanwhile, cooled a bit after a strong run, with light sweet crude trading around $48 a barrel.
The recent recovery in oil is more to do with the Russia-Ukraine dispute and OPEC members tightening production than the Israel-Gaza conflict, said Jan Stuart, an analyst at UBS.
"Generally, oil demand rises from January to February, and cold is adding to gas oil demand. Also utilities are burning more fuel oil -- indeed, several eastern European utilities were told to burn oil instead of natural gas because Russia cut its gas exports transiting the Ukraine," he said.
Gas supplies to Europe from Russia, through Ukraine, were completely halted Wednesday.
Yields on 10-year Treasury bonds were little moved in early action.
On the corporate front, Alcoa dropped 6% in Frankfurt after it announced plans to cut 13,500 jobs, close plants and curb aluminum output.
Bank of America shares were little moved in Frankfurt as the bank raised $2.8 billion from selling shares in China Construction Bank.
The earnings docket for Wednesday includes agrichemicals giant Monsanto , wines maker Constellation Brands and, after the close, retailer Bed Bath & Beyond .
Satyam Computer Sciences tumbled more than 70% in Mumbai after India's fourth-largest software firm announced it had inflated cash and bank balances by more than $1 billion, leading the group's founder and chairman to quit.
In late trade, India's Sensex dropped more than 6%.
"It's a major blow to sentiment," said Gurunath Mudlapur, managing director at Atherstone Capital Market in Mumbai. "Market sentiment had just about started to improve after a long period of time, but with this development, the confidence is again getting shattered."
Other Asia markets were mixed, with the Hang Seng dropping 3.4% in Hong Kong, while the Nikkei 225 added 1.7% in Tokyo.
In Europe, a combination of profit taking and fund-raising plans hurt stocks, with the FTSE 100 losing 1.6% in London. Utilities and oil producers weighed on the market. The pan-European Dow Jones Stoxx 600 dropped 0.6%.
