2011年8月20日土曜日

US stock futures tumble, following global markets - Kansas City Star

In this Aug. 3, 2011 photo, traders work on the floor of the New York Stock Exchange, in New York. Downbeat Japanese export and British retail sales figures renewed worries over the state of the global economy on Thursday, Aug. 18, and hit already fragile confidence in stock markets.In this Aug. 3, 2011 photo, traders work on the floor of the New York Stock Exchange, in New York. Downbeat Japanese export and British retail sales figures renewed worries over the state of the global economy on Thursday, Aug. 18, and hit already fragile confidence in stock markets.

More signs of economic weakness around the globe sent U.S. stock futures tumbling Thursday, following sharp declines in Asian and European markets.

More Americans joined the unemployment line last week than a week earlier. And consumers were under even more pressure at the cash register last month than economists thought. Reports from Japan and Britain also suggest the global economy is weakening as consumers spend only reluctantly.

Last week, 408,000 people applied for unemployment benefits. That is up from 399,000 the prior week and the highest level in four weeks. The job market has remained weak, and the unemployment rate has been at 9 percent or above since April.

Higher prices food, gas and clothes also helped to push inflation at the consumer level to 0.5 percent in July. That compares with a 0.2 percent drop in June and is the highest level since March.

When inflation is rising at the same time the job market is weak, the Federal Reserve has a more difficult time stimulating the economy, said Jack Ablin, chief investment officer at Harris Private Bank. The Fed has already said it will keep short-term interest rates at nearly zero into 2013. But the risk of further stoking inflation will hinder it from making more moves, such as a third round of bond buying known as quantitative easing.

"Every time the economy got the sniffles, we had the Federal Reserve standing by with tissues," Ablin said. "This time around, I think the box is empty, and we're going to have to go through this alone. I think we can do it. It's just not something we're accustomed to."

Asian markets started Thursday's declines. Japan's Nikkei 225 index fell 1.3 percent after the country said its exports fell 3.3 percent in July from a year earlier. It was the fifth straight month that exports fell for the world's third-largest economy. South Korea's Kospi stock index fell 1.7 percent, and India's Sensex index fell 2.2 percent.

The market drops extended to Europe. In London, the FTSE 100 index fell 2.4 percent after a report showed that growth in British retail sales slowed more than economists expected last month. Germany's DAX index fell 3.5 percent.

About 15 minutes ahead of the opening in New York, Dow Jones industrial average futures fell 245 points, or 2.2 percent, to 11,136. S&P 500 futures fell 29.30, or 2.5 percent, to 1,160.60. Nasdaq 100 futures fell 53.75, or 2.5 percent, to 2,121.50

Money flowed into Treasurys and gold, investments considered to be safer. Gold rose $27.40 per ounce to $1,821.20. That's up from around $1,400 at the start of the year and around $1,250 at the end of last August. The yield on the 10-year Treasury note fell to 2.07 percent from 2.16 percent late Wednesday. A bond's yield falls when its price rises.

Crude oil fell $2.76 per barrel to $84.82 on worries that a weaker global economy will mean less demand.

Computer network company NetApp Inc. fell 15 percent in premarket trading after its revenue fell short of analysts' expectations last quarter. Its forecast for earnings and revenue for the current quarter fell short of some analysts' expectations.

Technology stocks fell on Wednesday after computer maker Dell Inc. cut its forecast for revenue growth this year.

Stocks have been relatively calm so far this week. The Dow fell by 76 points on Tuesday and rose by just 4 points on Wednesday. It was the first time that the Dow rose or fell by fewer than 100 points in two straight days since Aug. 1.

But markets were particularly volatile earlier this month. Worries about Europe's debt troubles and the weakening global economy overshadowed strong earnings from U.S. companies. The Dow regularly swung by hundreds of points each day.

Early this month, investors worried as the U.S. government said it may default on its debt unless it was allowed to borrow more. The government beat the deadline to avoid a default, but Standard & Poor's downgraded the U.S. credit rating on Aug. 5 anyway. The credit-rating agency said it had less faith in the effectiveness and predictability of the government after its partisan debates. It cut the U.S. long-term rating by one notch to AA+ from the top AAA rating.

In the ensuing week, the Dow rose or fell by at least 400 points in each of the first four days, the first time that has happened.


View the original article here

0 件のコメント:

コメントを投稿