Stock Futures Fall on Weak Chinese Trade Data

NEW YORK (TheStreet) -- Stock futures were pointing to a lower open Friday as weak Chinese trade data provided more signs that the global economy is losing steam.

Futures for the Dow Jones Industrial Average were falling 54 points, or 37.19 points below fair value, to 13,084. Futures for the S&P 500 were down 6.89 points, or 5.69 points below fair value, at 1394. Futures for the Nasdaq 100 were down 10.75 points, or 9.71 points below fair value, at 2707.

Data from China's General Administration of Customs showed the country's exports grew a mere 1% in July from a year ago, falling significantly short of forecasts for an 8.6% increase, according to a Reuters poll. Imports grew just 4.7%, far below expectations of a 7.2% rise.

On Thursday, data showed that industrial production in China fell to 9.2% in July from 9.5% in June, its lowest rate since May 2009.

"Clearly, the sluggish export sector was another factor behind the weaker-than-expected industrial production data yesterday," said Yao Wei, a China economist at Societe Generale. "We think July data probably was not the bottom."

"And worse still, there seems to be very little Beijing can do to revive export growth. During a synchronized global slowdown, any unilateral action, such as export subsidies and currency depreciation, could risk trade disputes. The hope that external demand will underpin China's economy is ever more diminished, which makes the task of domestic economic rebalancing ever more urgent."

Wei said he thinks that in the very short term Beijing will make one more attempt to revive market confidence, mostly likely with an imminent 50-basis point reserve ratio requirement cut.

On the U.S. economic front, the Labor Department reported a 0.6% decline in import prices in July and a 0.5% increase in export prices. Economists had forecast a 0.1% rise in import prices and an unchanged reading for exports, according to Reuters.

September crude oil futures were off 99 cents at $92.37 a barrel and December gold futures were down $8.20 at $1,612 an ounce.

The benchmark 10-year Treasury was rising 13/32, lowering the yield to 1.647%. The greenback was up 0.13%, according to the dollar index.

The FTSE in London was slipping by 0.21% and the DAX in Germany was down 0.53%.

The Hong Kong Hang Seng index closed lower by 0.66% and the Nikkei in Japan settled down 0.97%.

In corporate news, the Justice Department won't prosecute Goldman Sachs (GS) or the firm's employees for financial fraud related to the mortgage crisis.

The Justice Department's year-long investigation stemmed from allegations made in a report by a Senate panel investigating the 2008-2009 financial crisis.

J.C. Penney (JCP) reported a loss of $147 million, or 67 cents a share, in the quarter ended July 28, compared with year-earlier net income of $14 million, or 7 cents a share, amid steep sales declines since the company switched to a new pricing plan last winter.

Sales declined nearly 23% to $3.02 billion as revenue at stores opened at least a year tumbled 21.7% compared with the first quarter's 18.9% decline.

The adjusted loss in the quarter was 37 cents a share. Analysts, on average, had predicted a loss of 26 cents a share on revenue of $3.2 billion.

The company has withdrawn its profit guidance for the year.

The initial public offering of U.K. soccer club Manchester United (MANU) was priced below its expected range. Shares were priced Thursday at $14 a share, below expectations of $16 to $20.

The IPO values the club at $2.3 billion. The stock begins trading Friday on the New York Stock Exchange.

Chipmaker Nvidia (NVDA) topped analysts' expectations on the top and bottom lines its second quarter. The results were driven by mobile computing, particularly the booming tablet market, according to Nvidia CEO Jen-Hsun Huang.

Japanese insurer Dai-ichi Life said Friday it agreed to acquire up to 20% of Janus Capital (JNS), the U.S. asset manager.

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-- Written by Andrea Tse in New York.



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