Stock Futures Weaken as Europe, China See Cooling Economies
NEW YORK (TheStreet) -- U.S. stock futures were pointing to a weaker start Thursday amid signs of slowing economic conditions in China and Europe.
Futures for the Dow Jones Industrial Average were declining 55 points, or 43.6 points below fair value, at 13,011. Futures for the S&P 500 were slipping 7 points, or 6.8 points below fair value, at 1391, indicating that the index could fall for a third straight day. Futures for the Nasdaq were off 12.3 points, or 9.7 points below fair value, at 2723.
U.S. stocks finished mixed Wednesday after a disappointing read on the housing market and bearish comments from Federal Reserve Chairman Ben Bernanke on Europe.
Fears of a slowing Chinese economy were exacerbated Thursday as the HSBC flash purchasing managers index indicated that Chinese manufacturing activity declined sharply in March. The index retreated to 48.1 for March from February's final reading of 49.6. New orders declined to a four-month low, while an expected rebound in export orders failed to materialize.Glum economic conditions were also seen in Europe, with more signs that the eurozone was sliding into a recession. Business activity shrank more than expected in March, according to a composite purchasing managers' index for the single-currency bloc. The index fell to 48.7 in March from 49.3 in February, according to Markit Economics, coming in below the 50 threshold that points to growth. Output as a whole declined in the first quarter Overseas, London's FTSE was falling 0.98%, and Germany's DAX was declining by 1.51%. In Asia, Japan's Nikkei Average finishing higher by 0.40% and Hong Kong's Hang Seng index closed ahead by 0.22%. In the U.S., the Labor Department said that weekly initial jobless claims for the week ended March 17 fell 5,000 to 348,000, coming in at their lowest level since Feb. 2008. Economists surveyed by Thomson Reuters expected an increase in jobless claims to 354,000. The four-week moving average fell 1,250 to 355,000. The news was doing very little for the markets. "Most will say this is evidence of continuing improvement in the labor market, but we'll suggest that the pace of improvement seems to be stalling -- so good, but not great," says David Ader, market strategist with CRT Capital Group. Also Thursday, the Conference Board's leading indicators report is likely to show a rise of 0.6% in February after a climb of 0.4% in January, according to economists. On Thursday, the print for the Federal Housing Finance Agency housing price index for January will be released after a jump of 0.7% was registered in December.
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