NEW YORK (TheStreet) -- U.S. stock futures were indicating a weak start for Wall Street on Thursday as investor sentiment soured on signs of a slowdown in China, the world's second-largest economy.
S&P 500 futures were slumping 5 points, or 5.41 points below fair value, to 1,833.5, Dow Jones Industrial Average futures were declining 55 points, or 47.34 points below fair value, to 16,262, Nasdaq futures were down 0.5 points, or 0.27 points below fair value, to 3,620.
Chinese manufacturing activity shrank in January for the first time in six months, according to the flash Markit/HSBC Purchasing Managers' Index. The preliminary report showed a decline to 49.6 from the final December figure of 50.5. "The credit crunch in the nation has compromised with growth objectives, triggering worldwide concerns," said Singapore-based Phillip Futures investment analyst Chee Tat in a note.
Earnings from McDonald's (MCD) will be released before the opening bell. The hamburger giant is expected by analysts on Thursday to report fourth-quarter earnings of $1.39 a share on revenue of $7.11 billion.
The economic calendar is busy, with initial jobless claims for last week at 8:30 a.m. EST, the January Markit "flash" PMI manufacturing index at 8:58 a.m., the November Federal Housing Finance Agency's housing price index at 9 a.m., December existing home sales at 10 a.m., and December leading indicators at 10 a.m. Jobless claims and existing home sales will be eyed most closely.
Jobless claims of 326,000 are expected, unchanged from preceding week. Existing home sales are forecast to have edged up to a seasonally adjusted annual pace of 4.94 million.
The Hong Kong Hang Seng closed off 1.51%, the Shanghai Composite fell 0.47%, the DAX dipped 0.21%, the U.K. FTSE slipped 0.09%, all dragged down by the poor China data.
IBM (IBM) shares were up 0.41% to $182.99 after China's Lenovo agreed to acquire IBM's x86 server business for $2.3 billion. eBay (EBAY) shares were popping more than 4% to $56.74. Activist investor Carl Icahn has taken a large stake in eBay and is calling for the company to spin off its highly successful payments division PayPal. Netflix (NFLX) was surging 16.26% to $388 after reporting better than expected fourth-quarter earnings and 33.42 million streaming subscribers for the quarter.
Starbucks (SBUX) is forecast to report fiscal first-quarter earnings on Thursday of 69 cents a share on sales of $4.29 billion. A year earlier, the coffee company earned 57 cents a share.
-- Written by Andrea Tse in New York.