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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Stock Futures Slip as American Eagle Plunges

NEW YORK (TheStreet) -- U.S. stock futures were slipping Tuesday as investors absorb data on the health of the economy and await a timeline for a slowdown in the Federal Reserve's bond-buying program.

Before the market open, the U.S. trade deficit was shown to have declined to $34.2 billion in June from an upwardly revised $44.1 billion in May, in a report published by the Census Bureau. Economists were expecting the trade deficit to shrink to $43.5 billion.

Futures for the S&P 500 were down 2.75 points, or 2.69 points below fair value, to 1,699.75. Futures for the Dow Jones Industrial Average were falling 30 points, or 26.13 points below fair value, to 15,524. Futures for the Nasdaq were down 2 points, or 3.39 points below fair value, to 3,134.

To illustrate investor caution about a market that has consistently hit new highs this year, Jonathan Krinsky, Miller Tabak's chief technical market analyst, says the New York Stock Exchange composite volume on Monday was running 22% below Friday's pace, which had already been 17% below Thursday's pace. That would put Monday's volume at around 2.3 billion shares, making it the slowest full-day volume since Dec. 28.

Investor wariness may combine with the vacation month of August to produce a market with little volatility.

American Eagle Outfitters (AEO) was plunging more than 15% to $16.90 in premarket trading after the teenage and young adults clothing company reduced its current-quarter earnings guidance to 10 cents a share from last year's 21 cents due to weaker than expected sales and margin results.

Michael Kors (KORS) was surging 6.41% to $72.23 after the apparel and accessories company reported quarterly earnings per share of 61 cents, which beat expectations by 12 cents as revenues also exceed estimates and same-store sales rose by 27%.

Molson Coors (TAP) was edging up 2.46% to $51.31 after the beer company surpassed second-quarter earnings estimates by 13 cents a share at $1.51 a share and reported revenue that also topped expectations as the company benefited from the acquisition of the its Central Europe operations and improved performance by its international businesses.

"On the whole, we would say the data continues to paint a picture of an economy that is exhibiting gradual and grudging improvements," Russ Koesterich, Blackrock's chief investment strategist in New York, said in a note. "That said, however, we believe investors are likely to witness more volatility when we get into the fall. In our view, September is likely to provide three challenges for equity markets."

He said that among those challenges is that September is a month when the calendar has "traditionally mattered" -- and it has historically been the worst month for stock prices. Second, he said he expects anxiety over the direction of monetary policy to rise in advance of the Fed's mid-September policy meeting. And third, Koesterich predicted that Europe will re-emerge as a source of volatility as investors focus their attention on next month's federal election in Germany.

"Overall, we still believe that equity valuations are reasonable and that prices can continue to advance over the next year, but we would also advocate a more defensive posture going into the fall."

In other economic events, Chicago Federal Reserve Bank President Charles Evans is expected to give a speech at 9:30 a.m. More Fed officials' speeches are expected later in the week, though Philadelphia Fed President Charles Plosser's has been cancelled for tomorrow and will be rescheduled.

The benchmark 10-year Treasury was flat with the yield at 2.641%. The dollar was off 0.16% to $81.75 according to the U.S. dollar index.

The FTSE 100 in London was down 0.07%, while the DAX in Germany was off 0.06%. The Hong Kong Hang Seng closed down 1.34%, and the Nikkei 225 in Japan finished up 1%.

Written by Andrea Tse in New York

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

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 16,979.13 +59.54 0.35%
S&P 500 1,986.51 +4.91 0.25%
NASDAQ 4,526.4820 -1.0320 -0.02%

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