Futures Slip on Fed Stimulus Doubts

NEW YORK (TheStreet) -- Stock futures pointed to a weaker open Wednesday as investors questioned whether expected monetary stimulus measures from the Federal Reserve next week will be large enough to strengthen the recovery.

Futures for the Dow Jones Industrial Average were down by 42 points, or 37 points below fair value at 11,082. Futures for the S&P 500 were 6 points lower, or 5 points below fair value at 1177 and Nasdaq futures were off by 8 points, or 9 points below fair value.

Stocks finished Tuesday's session with slight gains as encouraging consumer data offset some disappointing earnings reports.

On Wednesday, a Wall Street Journal report said the Fed is likely to purchase a few hundred billion dollars of U.S. Treasury bonds over several months to lower long-term interest rates and bolster the recovery. The estimate, which is lower than some figures that have been floating around -- and well below the $2 trillion of purchases the Fed enacted during the financial crisis, created some doubt among investors that measures will be large enough to be effective.

The Mortgage Bankers Association said mortgage applications rose 3.2% on a seasonally adjusted basis in the week ended Oct. 22 while the refinance index increased 3% week-over-week.

The Department of Commerce said durable goods orders rose 3.3% in September, outpacing the 1.8% increase that economists had expected, according to according to Briefing.com. That compares to a decline of 1% in August. Excluding transportation, orders fell 0.8%, missing expectations for a 0.2% uptick.

New-home sales data for September will be released at 10 a.m. EDT. Economists anticipate sales to rise to 299,000, from 288,000, previously.

At 10:30 a.m. the Energy Information Administration reports on weekly energy inventories. Analysts polled by Platts are anticipating a build of 1.5 million barrels in crude oil supplies during the week ended Oct. 22. Gasoline stockpiles are slated to show an increase of 900,000 barrels and distillates are expected to decline by 1.5 million barrels.

Late Tuesday, the American Petroleum Institute reported a larger-than-expected increase of 6.43 million barrels in crude stocks.

CommScope (CTV) agreed to be bought and taken private by asset manager Carlyle Group for $31.50 a share, or $3.9 billion.

In earnings news, Procter & Gamble (PG) topped profit expectations by 2 cents with earnings $1.02 a share despite reporting a 7% decline in its fiscal first quarter. Sales rose 2% to $20.1 billion while analysts had been looking for sales of $20.24 billion. The stock traded 0.7% higher to $63.32 ahead of Wednesday's opening bell.

Sprint (S) posted a wider-than-expected loss of 30 cents a share in the third quarter although sales of $8.15 billion exceeded expectations. Analysts had expected a loss of 28 cents a share on sales of $8.02 billion. The stock lost 4% to $4.58 in early trading.

Shares of business software maker SAP (SAP) traded 5.4% lower to $51.15 after the company missed analysts' profit expectations with earnings of €501 million ($691.4 million). Sales, meanwhile rose 20% to €3 billion ($4.15 billion).

Germany's largest bank Deutsche Bank (DB) posted a third-quarter loss of €1.2 billion ($1.65 billion) after recording a €2.3 billion charge related to its investment in Deutsche Postbank. Net revenue, excluding the charge, was €7.3 billion, compared with €7.2 billion a year earlier. Shares listed on the New York Stock Exchange gained 0.8% to $57.90.

Whirlpool (WHR) said third-quarter earnings fell 9% to $79 million, or $1.02 a share and sales rose 0.5% to $4.5 billion. Adjusted earnings of $2.22 a share surpassed estimates for a profit of $1.71 a share and shares rose 1.6% to $85.85.

In commodity markets, the December crude oil contract shed 72 cents, to trade at $81.83 a barrel. Meanwhile, the December gold contract lost $5.10 to $1,333.50 an ounce.

Meanwhile, the dollar was trading higher against a basket of currencies with the dollar index up by 0.2% and the benchmark 10-year Treasury note declined 13/32, strengthening the yield to 2.690%.

Overseas, Hong Kong's Hang Seng lost 1.9% while Japan's Nikkei inched 0.1% higher. The FTSE in London declined 0.4% while the DAX in Frankfurt gained 0.1%.

--Written by Melinda Peer in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.