Futures Dip Despite Jobless Claims Drop
NEW YORK (
) -- Stock futures pointed to a weaker open Wednesday despite a larger-than-expected drop in initial jobless claims and a narrowed U.S. trade deficit.
Futures for the
Dow Jones Industrial Average
were down by 8 points, or 3 points below fair value at 11,305. Futures for the
S&P 500
were nearly a point lower, or slightly below fair value at 1210 and
Nasdaq
futures were down by 3 points, or nearly half of a point below fair value.
Stocksretreated Tuesday as commodities rallied and investors appeared hesitant to push equities up after they hit two-year highs last week.
The prospect of additional quantitative easing measures from the U.S.
Federal Reserve
prompted investors to pour into hard assets, pushing commodity prices to new highs on Tuesday. On Wednesday, the January crude oil contract was down by 4 cents, to trade at $87.31 a barrel after hitting a two-year high, and the December gold contract lost $17 to trade at $1,397.20, after settling at a new record of $1,410.10 on Tuesday.
The
dollartraded higher against a basket of currencies with the dollar index up by 0.4% and the benchmark 10-year Treasury note fell 17/32, lifting the yield to 2.724%.
Global stocks traded mostly lower, although Japan's Nikkei increased by 1.4% as the dollar rose against the yen. Chinese markets were pressured by reports that some banks are increasing reserves to tighten lending and cool economic growth.
China'strade surplus jumped to $27.1 billion, its second-highest level this year in October. Hong Kong's Hang Seng fell 0.9%. In Europe, the FTSE in London was down by 0.7% and the DAX in Frankfurt was off by 0.5%.
The leaders of major economies are also looking ahead to the start of a two-day
G20summit in Seoul, South Korea, on Thursday. The top issue likely will be currency manipulation as several leaders of emerging-market countries have accused the U.S. of weakening the dollar through additional stimulus measures, thereby making their economies more vulnerable to inflation.
The number of Americans who sought unemployment benefits for the first time fell by 24,000 to 435,000 during the week ended Nov. 6, the Labor Department said. Economists had expected claims to drop by 7,000, according to Briefing.com. The initial weekly jobless claim report came a day early because of Thursday's Veterans Day holiday.
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The Department of Labor said import prices rose 0.9% in October, and export prices ticked 0.8% higher. Excluding volatile energy prices, imports increased 0.3% after similar growth in the previous month. Exports, excluding volatile agriculture prices, rose 0.7% after growth of 0.3% in September.
The Commerce Department said the U.S. trade deficit narrowed to $44 billion in September, which was slightly better than the shortfall of $44.8 billion that economists had been expecting, according to Briefing.com.September's figure compares to August's deficit of $46.5 billion.
At 10:30 a.m. ET, the Energy Information Administration issues its weekly read on energy inventories. Analysts polled by Platts forecast a 2.1 million-barrel build in crude oil supplies in the week ended Nov. 5. Gasoline stocks are expected to shed 1.3 million barrels and distillates are slated to decline by 2 million barrels.
Late Tuesday, the American Petroleum Institute said crude inventories fell by 7.40 million barrels.
At 2 p.m., the U.S. Treasury is expected to say that the federal deficit fell to $140 billion in October from 176.4 billion in September, according to Briefing.com.
GeneralMotors
reported its third consecutive profitable quarter and said it expects to be profitable for the full year. The automaker, which is preparing for an initial public offering that could come as soon as next week, reported earnings of $2 billion, or $1.20 a share, on sales of $34.1 billion.
Dutch financial services company
ING
(ING) - Get Report
said third-quarter earnings slipped 26% on a goodwill writedown related to the U.S. insurance business.
Cisco Systems
(CSCO) - Get Report
and
DryShips
(DRYS) - Get Report
are expected to report per-share earnings of 40 cents and 26 cents, respectively, after the market closes.
--Written by Melinda Peer in New York
.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
