Sentiment seems to be bordering on the negative, as some of recent economic indicators have raised questions regarding the premise that the domestic economic recovery is on a firmer footing. Added to these domestic concerns, global data points haven't been encouraging either. Traders may now seek clarity on the economic outlook from a slew of key economic data due later in the day. The U.S. non-farm payrolls report is likely to be on the radar, especially given the weakness of recent labor statistics.
As of 6:30 am ET, the Dow futures are slipping 111 points, the S&P 500 futures are receding 17 points and the Nasdaq 100 futures are moving down 28.75 points.
U.S. stocks retreated modestly on Thursday amid the release of some lackluster domestic economic reports. The Dow Industrials fell 26.41 points or 0.21 percent before closing at 12,394, the S&P 500 Index ended down 2.99 points or 0.23 percent at 1,310 and the Nasdaq Composite closed at 2,827, down 10.02 points or 0.35 percent at 2,827
On the economic front, Individual automakers are scheduled to release their monthly U.S. sales results for April. Economists expect domestic vehicle sales of 14.5 million for May, up 14.4 million last month.
The Bureau of Economic Analysis is due to release its personal income & outlays report for April. Economists expect the report, which is due out at 8:30 am ET, to show that personal income as well as personal spending rose 0.3 percent in April.
Around the time, the Labor Department is scheduled to release its monthly non-farm payroll report at 8:30 am ET. Economists expect non-farm payrolls for May to increase by 150,000 and the unemployment rate to remain unchanged at 8.1 percent. In April, the economy added a smaller than expected 115,000 jobs, while the unemployment rate ticked down to 8.1 percent.
The results of the manufacturing survey of the Institute for Supply Management, which are based on data compiled from purchasing and supply executives nationwide, are due out at 10 am ET. Economists expect the index to show a reading of 54 for May, a modest drop from 54.8 in April.
The Commerce Department's construction spending report is also scheduled to be released at 10 am ET is expected to show a 0.4 percent increase in April.
In corporate news, Sara Lee (SLE) announced that its board has unanimously approved the separation of its international Coffee & Tea business from Sara Lee Corp. The board also approved a 1-for-5 reverse stock split of its stock, effective immediately after the separation.
Schlumberger (SLB) announced the completion of the sale of its Wilson distribution to National Oilwell Varco (NOV). Schlumberger also said it committed to divest the remaining portion of its distribution business by agreeing to support National Oilwell's previously announced acquisition of CE Franklin for C$12.75 in cash per share.
Esterline (ESL) reported second quarter earnings of $1.44 per share, including discrete items that benefited earnings by 15 cents per share, on sales of $504.8 million. The earnings were in line, while revenues were shy of estimates. The company also provided an updated full year earnings guidance of $5.10-$5.25 per share from its earlier guidance of $5.10-$5.40 per share.
Asian stocks declined across the board, although the Chinese markets bucked the downtrend with a marginal gain. The negative lead from Wall Street overnight and an insipid Chinese manufacturing data kept sentiment subdued for the third straight session.
The final HSBC manufacturing purchasing managers index showed considerable divergence with the official PMI numbers, with the index falling to 48.4 in May from 49.3 in April, indicating seventh successive month of deteriorating operating conditions in the manufacturing sector.
Japan's Nikkei 225 average languished below the unchanged line throughout the session before closing at 8,441, down 102.58 points or 1.20 percent. The yen's strength triggered selling export stocks. Australia's All Ordinaries ended down 16.80 points or 0.41 percent at 4,117, with mining stocks serving as a drag. Hong Kong's Hang Seng Index retreated 71.18 points or 0.38 percent at 18,558.
The European markets are also retreating sharply, with the French CAC 40 Index and the German DAX Index receding over 1.50 percent and 2 percent, respectively, while the U.K.'s FTSE 100 Index is down more than 0.75 percent.
On the economic front, a report released by Eurostat showed that the eurozone's jobless rate came in at 11 percent, in line with estimates.
Final estimates released by Markit Economics confirmed the deterioration in the eurozone's manufacturing activity in May. The revised purchasing managers' index came in at 45.1 in May compared to 45.9 in April and the flash estimate of 45.
by RTT Staff Writer
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