Futures Suggest Ugly Start for Stocks

The S&P and the Nasdaq could decline as the Fed meeting gets underway.
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Updated from 8:12 a.m. EDT

Wall Street appeared headed for a selloff in the early going Tuesday as traders geared up for the start of a two-day meeting of

Federal Reserve

policymakers in Washington.

Futures on the

S&P 500

were recently down almost 9 points to 1310 and were 10 points below fair value. Futures on the Nasdaq 100 were sliding 15 points to 1903 and were 20 points under fair value.

A bit later, the Fed will begin its next meeting in order to discuss rates, inflation and the economy. The central bank won't conclude the gathering until Wednesday, at which time it will announce any decision on rates and release a statement that should offer insight into officials' views on the future.

This time around, no change in the cost of borrowing is expected, but many experts believe the Fed could begin to unwind its series of cuts later this year as part of its bid to fend off inflation.

Inflationary concerns have been magnified in recent months, largely owing to the staggering run-up in commodities, which has pushed prices for food and energy to in some cases record levels. Lately, the uptrend was intact. Crude oil futures were up $1.59 to $138.33 a barrel. Gold was rising $3.10 to $890.30 an ounce.

Treasury prices were a bit stronger. The 10-year note was up 4/32 in price, yielding 4.15%, and the 30-year bond was adding 8/32, yielding 4.69%. The dollar was mostly lower, but it was gaining ground against the Canadian dollar and the Japanese yen.

Around the world, many major markets came under selling pressure. The Nikkei in Tokyo shed 0.1% to 13,850, and the Hong Kong Hang Seng surrendered 1.1% to 22,456.

Selling was even more pronounced in Europe, where London's FTSE slid 1.2% to 5598 and Frankfurt's Dax tumbled 1.6% to 6482. The Paris Cac was worse by 1.1%.

On the corporate side, one of the early losers was

UPS

(UPS) - Get Report

. Following the previous close, the package carrier cut its quarterly guidance, citing high fuel costs and the weak economy. Shares of UPS were down nearly 6%.

GM

(GM) - Get Report

, a Dow stock, is set to unveil a series of moves meant to help sell trucks and SUVs, including long-term no-interest financing. An

Associated Press

report said GM plans to boost prices on 2009 models.

Also,

NYSE Euronext

(NYX)

said it has agreed to buy a 25% stake in the Doha Securities Market for $250 million. NYSE Euronext, the operator of the New York Stock Exchange, was itself created by a series of mergers.

In the technology arena,

Nokia

(NOK) - Get Report

reached a deal to acquire Symbian, a maker of software for phones.

Ericsson

(ERIC) - Get Report

owns a stake in Symbian that it will sell to Nokia.

Among research calls, Credit Suisse initiated coverage of several homebuilding stocks with overweight ratings --

Centex

(CTX)

,

D.R. Horton

(DHI) - Get Report

,

KB Home

(KBH) - Get Report

,

Pulte

(PHM) - Get Report

,

Ryland

(RYL)

and

Toll Brothers

(TOL) - Get Report

.

However, the firm has neutral ratings on

Lennar

(LEN) - Get Report

,

MDC Holdings

(MDC) - Get Report

and

NVR

(NVR) - Get Report

and underperforms on

Hovnanian

(HOV) - Get Report

and

Meritage Homes

(MTH) - Get Report

.

Elsewhere, Thomas Weisel downgraded

Yahoo!

(YHOO)

to underweight from market weight, and UBS raised its price target on

Potash

(POT)

by $35 to $285.