Stock Futures Drop as Japan GDP Disappoints

NEW YORK ( TheStreet) - U.S. stock futures were pointing to a much lower opening Monday as indications that Japan's economic growth is slowing offer investors one less reason to extend this year's rally, already the biggest since 1997.

Futures for the S&P 500 were falling 0.44%, to 1,678.75.

Futures for the Dow Jones Industrial Average were sliding 0.38%, to 15,316. Nasdaq futures were decreasing 0.32% to 3,103.25.

U.S. stocks dropped on Friday as the Dow Jones Industrial Average booked its first weekly decline in seven weeks.

Japan's gross domestic product grew an annualized 2.6% in the second- quarter, according to a government report, short of 3.6% average forecast of economists in a Bloomberg survey.

"The weaker than expected GDP print puts more pressure on the government's decision over whether to hike sales taxes in April 2014," Jim Reid, a strategist at Deutsche Bank, wrote in a note on Monday morning discussing the outlook for Japan and government policymakers.

U.S. economic data was light for Monday as traders were anticipating the U.S. Treasury to post the monthly budget report for July. Economists polled by Thomson Reuters were expecting a federal budget deficit of $96 billion in July after printing a $116.5 billion surplus in June.

In company news, shares of Apple ( AAPL) were adding 0.59% to $457.12 after reports emerged during the weekend that the maker of iPads is planning to launch the next version of its iPhone on Sept. 10. Apple last unveiled a new iPhone at an event on Sept. 12, 2012.

European markets were sinking on Monday. The FTSE 100 in London was off 0.36%, and the DAX in Frankfurt was sliding 0.38%.

Asian markets closed mixed overnight. Japan's Nikkei average dropped 0.71% to 13,519 after the weaker-than-expected GDP report. Hong Kong's Hang Seng climbed 2.13% to 21,271.

The benchmark 10-year was adding 5/32, diluting the yield to 2.565%. The dollar was adding 0.39%, according to the U.S. dollar index.

-- Written by Joe Deaux in New York.

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