NEW YORK (TheStreet) -- U.S. stock futures were tanking in premarket trading Thursday as the markets were awash with risk aversion attributable to soft international data and deepening Portugal banking concerns. Weak earnings reports were also fueling the downbeat outlook.
Family Dollar (FDO) was retreating 2.48% to $62.65 after its quarterly profit declined by 33% and the company missed earnings estimates by 4 cents at 85 cents a share. The results reflect economic challenges facing its core customer and an intensely competitive environment.
Dow Jones Industrial Average futures were sinking by 155 points, or 152.61 points below fair value, to 16,758. Futures for the S&P 500 were declining 18.75 points, or 17.63 points below fair value, to 1,948.5. Nasdaq futures were behind by 37.5 points, or 37.51 points below fair value, to 3,848.
"The market shrugged off the rising cost of financing Portugal's debt yesterday and we suspect it's playing catch up, as Alcoa and Fed minutes fade," said Peter Cardillo, chief market economist at Rockwell Global Capital. "This type of action suggests a summer trading range is being established," he added.
Markets gained ground Wednesday after the release of the much-watched minutes of the Federal Reserve's chief policy-making committee showed that the central bank is preparing to end its historic program of monetary easing as soon as October. "If the economy progresses about as the Committee expects, warranting reductions in the pace of purchases at each upcoming meeting, this final reduction would occur following the October meeting," the Fed wrote in the minutes if its June 17-18 meeting.
European Stocks Tumble on Disappointing Data
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European stocks were tumbling as weaker-than-expected French consumer price data, disappointing industrial output figures for both France and Italy, and troubles at Portugal's largest listed bank added to the sense of gloom. In Lisbon, Banco Espirito Santo tumbled after a wealth management affiliate delayed payments on debt. Moody's Investors Service on Wednesday downgraded Espirito Santo Financial Group, Banco Espirito's 25% owner and the parent of the troubled wealth management business, and put Banco Espirito debt on review for a downgrade.
The Bank of England decided Thursday to maintain interest rates at a record low of 0.5%.
Jobless claims for the week ended July 5 fell by 11,000 to 304,000, vs. the consensus target of 315,000. Wholesale inventories for may, to be released at 10 a.m. EDT, are forecast to rise 0.6%, following April's 1.1% increase.
U.S. Attorney General Eric Holder has formally refused to meet with Bank of America CEO Brian Moynihan to hammer out a multibillion-dollar deal, as talks to resolve probes into shoddy mortgage securities sold by the bank remain at a standstill, Reuters reported, citing people familiar with the matter. American Apparel reached a deal with investment firm Standard General to receive an investment of up to $25 million to boost the clothing chain's finances. The agreement also will mean a shake-up of American Apparel's board.
Serving as a testament to Big Blue's commitment to get on the leading side of cloud innovation, IBM announced it will invest $3 billion over the next five years in two broad research and early stage development programs for chip technology. The research focuses on making semiconductors more efficient for cloud computing and Big Data systems. Warehouse retailer Costcosaid same-store sales in June rose 6%, beating Wall Street's estimates of a 5.3% increase.
-- By Andrea Tse in New York