Stocks Poised for Losses as Traders Look to Take Profits
Updated from 6:49 a.m. EST
Premarket futures were predicting a lower open for stocks in the U.S. Wednesday, as traders looked to take profits after a three-day rally in the blue-chip indices and a new pile of data releases pointed to additional economic pain.
Futures for the
S&P 500
were down 18 points at 836 and were 21 points short of fair value.
Nasdaq
futures were lower by 6 points at 1130 and were 13 points below fair value.
On Tuesday, stocks fluctuated following the
Federal Reserve's
announcement of an $800 billion program to bolster mortgage- and consumer-lending markets. The blue-chip indices finished with gains, while the Nasdaq ended lower.
The schedule Wednesday was heavily loaded with economic reports.
The Census Bureau reported that
durable-goods orders
declined 6.2% in October, a bigger drop than the 2.5% expected by economists. The September figure was revised down to a 0.2% decline from a 0.8% increase.
The Commerce Department's read on
personal income
showed a 0.3% uptick for October. Analysts had forecast a income growth of 0.1%.
Weekly initial jobless claims data from the Census Bureau showed claims were down 14,000 to 529,000 for the week ended Nov. 22. The previous claims figures were revised up by 1,000 to 543,000.
Due out later are a November manufacturing index reading from the Chicago Purchasing Managers Association, a consumer-sentiment survey from the University of Michigan and the Commerce Department's new-home sales data.
Outside of domestic indicators,
China's central bank
announced it cut its benchmark interest rate by 1.08%, a move that reflects increasing concern that one of the world's fastest-growing economies has slowed considerably.
Troubles weren't confined to Asia. The
European Commission
on Wednesday called for a $256 billion economic stimulus plan to help the continent alleviate its own recessionary woes.
As data releases painted a picture of the downturn, reports indicated that President-elect Barack Obama would tap former Federal Reserve Chair
to head a White House advisory board geared at steering the U.S. through the current financial turmoil.
As for the day's corporate earnings, equipment maker
Deere
(DE) - Get Report
announced an 18% decline in fourth-quarter profit.
Jeweler
Tiffany
(TIF) - Get Report
, meanwhile, announced a 57% decline in earnings on flagging U.S. sales.
In other company news, Fitch Ratings cut its debt rating on
Toyota
(TM) - Get Report
, putting a negative outlook on the company. Both domestic and foreign automakers have had a rough go of it thanks to flagging demand.
Canadian telecom company
BCE
(BCE) - Get Report
, announced that its leveraged buyout may not take place by its scheduled date of Dec. 11.
Among financial firms,
Goldman Sachs
(GS) - Get Report
ended discussions with
Panasonic
( PC) about a potential sale of Goldman's stake in
Sanyo
. Goldman cited concerns about the price and deal structure as it walked away.
In the commodities space, crude oil was climbing 88 cents to $51.65 a barrel. Gold was slipping $5.80 to $814.70 an ounce.
Longer-dated U.S. Treasury securities were rising in price. The 10-year was adding 16/32 to yield 3.05%, and the 30-year was up 24/32, yielding 3.58%. The dollar was higher vs. the euro and pound but softening against the yen.
Globally speaking, European exchanges such as the FTSE in London and the DAX in Frankfurt were trading lower. In Asia, Japan's Nikkei closed with losses, and Hong Kong's Hang Seng ended with gains.
