This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Stock Futures Slump on Tepid Chinese, European Manufacturing Data


NEW YORK ( TheStreet) -- Stock futures were edging lower Wednesday following tepid manufacturing reads from Europe and China.

Futures for the Dow Jones Industrial Average were off 7 points, or 4.7 points below fair value, at 12,938. Futures for the S&P 500 behind by 1.2 points, or 1.2 points below fair value, at 1359. Futures for the Nasdaq were falling 2.3 points, or 1.2 points below fair value, at 2589.

Stocks posted a mixed close Tuesday as the Dow pulled off the 13,000 mark and the market gave Greece's second, €130 billion bailout package a tepid reception.

Two reports from Markit Economics on manufacturing activity in Europe and China were weighing on futures. Eurozone business activity dipped to 49.7 in February from 50.4 in January according to Markit Economics' purchasing managers index. Analysts had expected an increase to 50.6. Any reading below 50 suggest economic contraction.

Markit Economics' purchasing managers index on China manufacturing came in at 49.7 in February, rising marginally from 48.8 in January.

"Growth remains on track of slowdown, despite the marginal improvement in the headline flash PMI led by quickened production after the Chinese New Year," said Hongbin Qu, chief economist at HSBC. "With a meaningful rebound of domestic demand not in sight, external weakness is starting to bite, adding more downside risks to growth."

The first major U.S. report of the week will come out today at 10 am EST with the National Association of Realtors' reading on existing-home sales for January. Investors will be looking for further indications that the housing market has bottomed out. Sales are expected to have ticked up 2% to a 4.65 million-unit annual rate, according to estimates from Thomson Reuters. In December, existing-home sale rose 5% to a 4.61 million annual pace.

While the consensus target remains considerably below the cyclical peak of the 6.84 million units that changed hands in 2006, it marks the fourth consecutive monthly gain in this indicator, representing an 11% advance since September, said Millan Mulraine, senior U.S. strategist, TD Securities.

"There is every reason to be encouraged by the recent positive momentum in the housing sector, particularly given growing evidence of stabilization in activity in the past few months," said Mulraine, who noted that for the economy to successfully transition to a "self-sustaining" economic recovery powered by consumer spending it is necessary that the housing sector stabilizes and the labor market builds on the positive momentum of the past two months.

"Admittedly, with the approval of the Greek bailout package -- reducing the threat of a disorderly default -- and the passage of the full-year extension of the payroll cut on Capitol Hill last week, two potential near-term downside risks to the economic recovery have been removed," he added.

Although nerves about Greece have been somewhat alleviated with the second bailout plan for the country, investors are still impatient to hear that the country has completed a swap of private debt holdings by March 10, which is part of the deal.

Germany's DAX was down 0.63% while London's FTSE was falling 0.36%. Japan's Nikkei Average settled up 0.96% and Hong Kong's Hang Seng finished up 0.33%.

In corporate news, PC maker Dell's (DELL) fiscal fourth-quarter earnings came in below analysts' expectations despite a solid revenue performance.

Dell reported non-GAAP earnings of $913 million, or 51 cents a share, on revenue of $16.03 billion for the quarter ended Feb. 3. Analysts were expecting earnings of 52 cents a share on revenue of $15.96 billion.

For the current fiscal year, the company expects non-GAAP earnings of more than the $2.13 a share it earned last year. Wall Street expects a profit of $2.05 a share in the fiscal year ending in January 2013. Dell also said it expects a sequential decline in revenue of 7% in its fiscal first quarter ending in April.

Shares were tumbling 6.6% to $17.01 before the opening bell.

Homebuilder Toll Brothers (TOL) posted a fiscal first-quarter loss of $2.8 million, or 2 cents a share, a swing from year-earlier net income of $3.4 million, or 2 cents. Revenue fell to $322 million from $334.1 million a year earlier. Analysts expected Toll to earn 2 cents a share on revenue of $360.8 million. Shares were sliding 2.5% to $23.09.

Brocade Communications (BRCD), the maker of communications networking equipment, posted an adjusted first-quarter profit of $93 million, or 20 cents a share, on revenue of $561 million. Analysts were expecting earnings of 13 cents a share on revenue of $542.2 million. Shares were rising 5.8% to $5.82 Wednesday.

Apple (AAPL) will hold a shareholder meeting on Thursday. The meeting comes as Apple has faced some criticism over worker conditions at Foxconn, its contractor in China. The company also may have to address what it plans to do with its cash pile of nearly $98 billion. Some analysts speculate that Apple will pay a "special dividend." Investors are also awaiting any hints on product announcements, including the highly anticipated iPhone5, iPad3 and Apple TV.

Shares of Apple, which recently soared to an all-time high of $526.29, were trading down 0.3% at $513.15.

Johnson & Johnson's (JNJ) Bill Weldon is stepping down as the health care giant's CEO. He will be replaced by Alex Gorsky, vice chairman and head of the company's largest business by revenue, on April 26, the day of J&J's annual shareholder's meeting. Shares were up 0.02% to $65.05.

April oil futures fell 46 cents to $105.79 a barrel. In other commodities, April gold futures were falling $4.80 to $1,753.70 an ounce.

The dollar index was up 0.3% at $79.31. The benchmark 10-year Treasury was rising 5/32, lowering the yield to 2.049%.

-- Written by Andrea Tse in New York.



>To contact the writer of this article, click here: Andrea Tse.

>To follow the writer on Twitter, go to http://twitter.com/atwtse .

>To submit a news tip, send an email to: tips@thestreet.com.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,131.97 +100.83 0.59%
S&P 500 1,998.98 +14.85 0.75%
NASDAQ 4,552.7590 +33.8570 0.75%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs