Stock Futures Are Weak as World Bank Cuts Global Outlook
NEW YORK (TheStreet) -- Wall Street appeared to be heading for a weak start on Wednesday as stock futures dipped after the World Bank slashed its global economic outlook.
The World Bank said overnight that the global economy got off to a bumpy start this year as a result of poor weather in the U.S., financial market turbulence, and the conflict in the Ukraine. As such, it has cut its 2014 world growth projections to 2.8% from 3.2%.
S&P 500 futures were down 9.5 points, or 8.69 points below fair value, to 1,941. Dow Jones Industrial Average futures were giving up 71 points, or 66.92 points below fair value, to 16,871. Nasdaq futures were off by 19 points, or 18.61 points below fair value, to 3,780.8.
Offsetting economic catalysts aren't expected Wednesday given a light economic calendar. Incoming data includes the U.S. Treasury budget at 2 p.m. EDT.European stocks fell on Wednesday amid a raft of earnings downgrades, and after the World Bank cuts its global growth forecast. Asian stocks were mixed. German shares were dragged down by a fall in Deutsche Lufthansa, which shed 14.87% in Frankfurt to 17.025 euros. Investors sold shares after the German flag carrier cut its 2014 operating forecast to about 1 billion euros, blaming weaker-than-expected revenue development in passenger and freight activities as well as negative impacts from strikes and the devaluation of the Venezuelan bolivar. Individual stock movers Wednesday may include Bank of America (BAC), Amazon.com (AMZN), American International Group (AIG), Google (GOOG) and Boeing (BA). Bank of America and the Justice Department have reached an impasse in negotiations over a multibillion-dollar settlement deal, The New York Times reported. Amazon.com has refused to take pre-orders for upcoming Time Warner home video movie titles, including "The Lego Movie," the Times reported. American International Group tapped long-time JPMorgan executive Peter Hancock as its new CEO, choosing a man with scant background in insurance but deep experience in the type of complex financial instruments that forced the giant insurer to take a $182 billion bailout. Google agreed to buy Skybox Imaging for $500 million in cash, subject to adjustments, as the Web search and mobile software giant tries to bolster its imaging capabilities. Also, Emirates Airlines has canceled its order for 70 Airbus A350 aircraft. The A350 is intended as Airbus' best hope for catching up in the long-haul market that is dominated by Boeing's (BA) 777 and 787 but has been plagued by years of delays and a multibillion dollar revamp. U.S. markets closed mixed Tuesday, with no impetus to make big moves. The S&P 500 recovered to close 0.02% lower. -- By Andrea Tse in New York
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