Economic fears continue to envelop Wall Street, as stimulus optimism wanes and ground realities strike. The U.S. index futures point to a lower open. Geopolitical tensions in China have led to a sell-off in commodities, accelerating the profit taking in the space. Sentiment across the Atlantic is hampered by no further progress seen in resolving the sovereign debt crisis, even as Spain's fiscal situation is surmised to be precarious. Domestically, the markets turn their focus on the results of a homebuilder survey due to be released shortly after the markets open.
As of 6:30 am ET, the Dow futures are moving down 37 points, the S&P 500 futures are slipping 4.50 points and the Nasdaq 100 futures are moving down 7 points.
U.S. stocks turned in a lackluster performance on Monday, as the Fed stimulus-induced rally lost steam.
On the economic front, the National Association of Home Builders is scheduled to release the results of its September survey on homebuilders' confidence at 10 am ET. The consensus estimates call for the index to rise to 38 from 37 in August.
Chicago Federal Reserve President Charles Evans is due to speak to the Bank of Ann Arbor Breakfast Meeting on "Perspectives on Current Economic Issues" at 8 am ET. New York Federal Reserve Bank President William Dudley is scheduled to speak to the Morris Council Chamber of Commerce, in Florham Park, New Jersey at 11:30 am ET. He will repeat his prepared remarks in an afternoon appearance at the Fox Valve factory in Montclair. Richmond Federal Reserve Bank President Jeffrey Lacker will speak to the Money Marketeers of NYU, in New York at 6:15 pm ET.
The Treasury Department is due to release a report on the flows of financial instruments into and out of the U.S. for July at 9 am ET.
In corporate news, Oracle (ORCL) announced an agreement to buy cloud-based social talent sourcing and corporate alumni management applications provider SelectMinds.
AMD (AMD) announced the appointment of Devinder Kumar, its SVP and corporate controller, as its interim CFO following the decision by incumbent Thomas Seifert to resign, effective September 28th, for pursuing other opportunities.
HNI (HNI) pre-announced that it expects third quarter revenues and operating profits below its previous outlook due to softer than expected demand at its office furniture segment. The company now expects sales growth of 7-10 percent, down from its earlier guidance of 11-14 percent growth. Additionally, the company also lowered its third quarter non-GAAP earnings guidance to 55 cents per share from 65-77 cents per share.
The major Asian markets all ended lower, as post-Fed decision profit introduced weakness. The Chinese market declined sharply yet again, while the South Korean market bucked the downtrend. Sentiment in the region was also hurt by geopolitical tensions in China that followed protests in China against the Japanese purchase of some islands in the East China Sea. China claims ownership to the islands and consequently, protests has erupted in China, impacting businesses of Japanese firms operating in China.
Japan's Nikkei 225 closed down 35.62 points or 0.39 percent at 9,124. Fast Retailing was the biggest decliners among the index decliners, with a drop of close to 7 percent. Automakers and other export stocks also saw weakness. On the other hand, resource, electric utility and electric machinery makers gained ground.
Australia's All Ordinaries languished below the unchanged line for the bulk of the session before closing down 4 points or 0.09 percent at 4,418. Energy stocks fell the most, dragging the markets lower.
Hong Kong's Hang Seng Index closed at 20,602, down 56.18 points or 0.27 percent.
On the economic front, the minutes of the Reserve Bank of Australia's September meeting showed that the committee felt that the inflation outlook provided scope to adjust policy in response to any significant deterioration in the outlook for growth. The minutes also revealed that committee members' view that the exchange rate was weighing more heavily on the economy than expected. Assessing the statement, Westpac sees signals that the central bank is close to cutting rates as soon as in October.
The major European markets are trading sharply lower, extending the declines of the previous session, as a lack of any further progress on the eurozone debt crisis front and global economic concerns contributed to the sell-off.
That said, a Treasury auction by Spain was well received, with the country succeeding in raising $4.576 billion euros in short term debt, above the upper end of the targeted amount. The cost of borrowing was also benign, while demand improved.
The consumer price inflation report released by the U.K. Office for National Statistical Office showed that the U.K. annual inflation rate eased to 2.5 percent in August from 2.6 percent in July. The rate was in line with expectations.
German economic sentiment improved in September, although it still remained at depressed levels. A survey by Zew showed its economic sentiment index for Germany rose to -18.2 in September compared to expectations for a reading of -20.
by RTT Staff Writer
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