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Stock Futures Point Lower on Eurozone Uncertainties


NEW YORK (TheStreet) -- U.S. stock futures were mostly lower Wednesday as the markets grew more uncertain about the stability of the eurozone and awaited another read on housing market conditions.

Futures for the Dow Jones Industrial Average were falling 26 points, or 1.45 points above fair value, at 13,379. Futures for the S&P 500 were declining 4 points, or 1.73 points below fair value, at 1433. Futures for the Nasdaq were shedding 10.75 points, or 4.98 points below fair value, at 2793.

The Census Bureau is expected to report at 10 a.m. EDT that new-home sales rose to a seasonally adjusted annual rate of 380,000 in August from 372,000 in July.

"If housing is on the mend (we expect multi-year high in new home sales today) and household deleveraging is close to running its course, then a bigger question is what this means for inflation," said Eric Green, global head of research for rates and foreign exchange at TD Securities. "Should one expect the aftermath of unlimited QE be a period of accelerating real and implied inflation? Will it derail the Fed's pro-growth policies? The recent pop in breakeven rates suggests that is a real risk, but we are more cautious owing to the tension between what the Fed wants (more inflation) and a price environment that remains disinflationary."

Federal Reserve Bank of Chicago President Charles Evans speaks in Indiana on Wednesday.

Uncertainty over the outlook for the eurozone persisted with the markets unsure on when Spain will officially request a bailout.

Worries about the stability of the euro region compounded with a general, anti-austerity strike underway in Greece and protestors in Spain clashing with police a day earlier in Madrid, demanding the dissolution of parliament as the Spanish government prepares to announce the 2013 budget Thursday.

Meanwhile, the important Spanish region of Catalonia has called for a snap election in November in order to be given more autonomy in handling its finances.

All that "has given rise to the first real risk-off trade since (Mario) Draghi promised whatever it takes," said Richard Gilhooly, U.S. director of interest rate strategy at TD Securities.

Spanish 10-year yields were above 6% Wednesday.

The FTSE in London was sliding 1.11% and the DAX in Germany was falling 1.67% on Wednesday. Hong Kong's Hang Seng index closed down 0.83% and the Nikkei in Japan settled behind by 2.03%.

The benchmark 10-year Treasury was rising 5/32, pushing the yield down to 1.657%. The greenback was up 0.32%, according to the dollar index.

November crude oil futures were falling 73 cents to $90.64 a barrel. December gold futures were flat at $1,766.40.

The major U.S. stock averages suffered steep losses Tuesday after Philadelphia Fed President Charles Plosser said he believes it's unlikely the central bank's third round of quantitative easing will meaningfully boost the economy.

In corporate news, Jabil Circuit (JBL), the electronics manufacturing services company, missed Wall Street's expectations Tuesday in its latest quarterly results and issued a weak first-quarter forecast.

RadioShack (RSH) announced that James Gooch will step down from his positions as CEO and a board director of the company, effective immediately.

Dollar Thrifty Automotive (DTG) said Wednesday that its "go-shop" period has expired with no party submitting competing acquisition proposals envisaged by the company's merger agreement with Hertz (HTZ).

As previously announced, HDTMS, an affiliate of Hertz, put forth a tender offer on Sept. 10 for all of Dollar Thrifty's outstanding shares of common stock at $87.50 a share. The tender offer expires at midnight on Oct. 5 and Dollar Thrifty's board is unanimously recommending that stockholders accept it.

Specialty department store Kohl's (KSS) has announced the opening of 12 stores, which the company said will create about 1,500 jobs nationwide.

Yahoo! (YHOO), the Internet giant, named Ken Goldman as chief financial officer.

Goldman replaces Tim Morse, who had been with Yahoo! for more than three years. Morse is expected to leave the company this fall. Goldman most recently served as financial chief of Fortinet (FTNT).

Bookseller Barnes & Noble (BKS) rolled out its new Nook HD line on Wednesday.

The new Nook HD will come in two sizes, one with a 7-inch screen, starting at $199, and one with a new 9-inch diagonal screen, called the Nook HD+, starting at $269.

IBM (IBM) plans to announce Wednesday it will ramp up its efforts to sell so-called cloud computing services to mid-size businesses, The Wall Street Journal reported.




--Written by Andrea Tse in New York.



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

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