NEW YORK ( TheStreet) -- Stock futures were slipping Wednesday despite upbeat earnings reports and deal announcements, as the Organization for Economic Cooperation and Development issued an optimistic forecast on the U.S. economic recovery, further stoking concern that the Federal Reserve will begin to pullback on its stimulus measures.
The OECD on Wednesday, in a biannual economic publication, lowered its overall outlook on global economic growth to 3.1% this year and 4% next year from the November estimate of 3.4% in 2012 and 4.2% in 2013. The Paris-based think tank predicted that the eurozone economy would continue to contract this year and estimated a slowdown in China growth to 7.8% this year, down from the prior prediction of 8.5%, both not sufficiently offset by signs of increasing strength in the U.S. and Japan.
The OECD said that while labor markets are set to firm gradually in the U.S. and Japan over the coming two years, unemployment is likely to continue to rise further in the euro area, stabilizing above 12% only in 2014.
"June will probably be dominated with questions about the Fed," said Ryan Detrick, Cincinnati-based senior technical strategist with Schaeffer's Investment Research. "When are they going to lower their bond purchases? Will the economy be able to stand on its own without the Fed backstop? No one knows the answer to these questions, but the reality is the U.S. economy is on much better footing than most give it credit."Futures for the S&P 500 were down 8.5 points, or 11.91 points below fair value, to 1,646. U.S. stocks markets gained Tuesday, bouncing back after last week's first weekly decline in five following a report that reaffirmed improvements in U.S. home values and data that showed better-than-expected consumer confidence in the economic recovery. Before the open Wednesday, the Mortgage Bankers' Association's purchase applications index showed a rise of 3% in the week of May 24 despite concerns about the Fed pulling back on stimulus. Boston Federal Reserve Bank President Eric Rosengren, an FOMC voting member, gives a speech at 12 p.m. EFT on the economic outlook in Minneapolis. Futures for the Dow Jones Industrial Average were off 77 points, or 94.39 points below fair value, to 15,296. Futures for the Nasdaq were shedding 14.25 points, or 21.19 points below fair value, to 2,989.25. Smithfield Foods (SFD) was soaring 25.07% to $32.48 after the meat processor announced that it has agreed to sell itself to Chinese meat processor Shuanghui Group of China for about $4.7 billion. Stewart Enterprises (STEI) was surging 33.68% to $13.02. The funeral home and cemetery operator is being acquired by competitor Service Corp. International for $1.1 billion in cash, or $13.25 a share, a 36% premium over Stewart's closing price Tuesday. Michael Kors (KORS - Get Report) was popping 3.36% to $64.06 after the apparel and accessories company beat quarterly estimates by 11 cents at 50 cents a share, with sales also topping expectations, as same-store sales jumped 37%. The Fresh Market (TFM - Get Report) was gaining 5.82% to $49.06 after the grocer's profits beat first-quarter estimates by two cents at 46 cents a share as same-store sales and profit margins strengthened. The DAX in Germany was falling 1.58% and the FTSE 100 in London was declining 1.56%. The Hong Kong Hang Seng closed off 1.61%. The Nikkei 225 in Japan finished up 0.1%. June gold futures were rising $3.70 to $1,382.60 an ounce. July crude oil futures were down 40 cents to $94.61 a barrel. The benchmark 10-year Treasury was down 1/32, raising the yield to 2.2%. The dollar was up 0.18% to $84.26 according to the