Wall Street is set to extend its declines if early indications are anything to go by, as traders dread the day the economy would be taken off stimulus support. The index futures are pointing to a lower opening on Thursday. That said, there a few market moving economic numbers due for the session, with jobless claims, the results of the Philadelphia Federal Reserve's manufacturing survey and existing home sales chief among them. Even a stronger number could lead to panic among traders, given that the Fed has premised the withdrawal of stimulus on growth.
As of 6:15 pm ET, the Dow futures are declining 121 points and the S&P 500 Index futures are receding 16.20 points, while the Nasdaq 100 futures are receding 31.50 points.
U.S. stocks declined on Wednesday in reaction to comments from Federal Reserve Chairman Ben Bernanke concerning the timetable for tapering off of bond purchases.
On the economic front, the Labor Department is scheduled to release its jobless claims report for the week ended June 15th at 8:30 am ET. Economists expect claims to rise to 340,000 from 334,000 in the week ended June 8th.
At 10 am ET, the National Association of Realtors will release its existing home sales report. Economists expect existing home sales to come in at a seasonally adjusted annual rate of 5 million units for May compared to a 4.97 million-unit rate for April.
Around the same time, the Philadelphia Federal Reserve is due to release the results of its manufacturing survey for June. The business conditions index based on the survey is expected to improve to -1 from -5.2 in May. Also around the same time, the Conference Board is scheduled to release its leading economic indicators index for May. The leading economic indicators index is expected to rise by 0.2 percent month-over-month in May compared to a 0.6 percent increase in April.
In corporate news, Jabil Circuit (JBL) reported third quarter results that exceeded estimates. The company's fourth quarter earnings guidance was above estimates, while the revenue guidance exceeded estimates. Micron Technology (MU) reported third quarter net income of 4 cents per share on net sales of $2.32 billion. The results were better than expected.
Red Hat (RHT) reported first quarter non-GAAP earnings rose to 32 cents per share from 30 cents per share last year. Revenues rose 15 percent to $363 million. The results exceeded estimates.
Steelcase's (SCS) first quarter earnings were in line, while its revenues missed estimates. The company's second quarter guidance surrounded the estimates. Finisar (FNSR) reported fourth quarter results that exceeded estimates, while its guidance was positive. CLARCOR's (CLC) second quarter results trailed expectations and its 2013 guidance was weak.
Oracle (ORCL) and TIBCO Software (TIBX) are due to release their quarterly results after the close of trading.
The major Asian markets slumped across the board, with Bernanke being the architect of the downfall after he confirmed that the central bank is on track to wind up its bond purchases by the middle of the next year. Adding fuel to fire, data released today showed that the Chinese manufacturing sector contracted at a faster rate in June.
Japan's Nikkei closed at 13,014, down 230.64 points or 1.74 percent. Export and real estate stocks paced the declines. Australia's All Ordinaries ended down 97.90 points or 2.02 percent at 4,744. A majority of sectors declined in the session, with the exception of healthcare and IT stocks. Energy and material stocks were the worst hit, as the dollar's strength weighed on these commodities.
Hong Kong's Hang Seng Index closed at 20,429, down 557.75 points or 2.66 percent. China's Shanghai Composite Index slumped 2.77 percent and Indonesian's Jakarta Composite was the biggest decliner in terms of percentage among the major Asian averages.
On the economic front, the results of a preliminary survey by Markit Economics and HSBC showed that the manufacturing sector in China continued to contract in June. The manufacturing purchasing managers' index fell to 48.3 in June from 49.2 in May, with new orders also contracting in the month.
European stocks also opened notably lower and have been moving broadly sideways. Apart from the Bernanke's pronouncement and weak Chinese manufacturing reading, the markets are also digesting the results of a stress test conducted by the Bank of England on the nation's bank.
Citing findings of a survey carried out by financial watchdog Prudential Regulation Authority, the central bank said five of the eight major UK banks, namely Barclays, Co-operative Bank, LBG, Nationwide and RBS, had an aggregate capital deficit of 27.1 billion pounds at the end of 2012, which well exceeded the standard.
On the economic front, the Federal Statistical Office reported that German producer price inflation rose 0.2 percent year-over-year in May, faster than the 0.1 percent increase in the previous month. Economists had forecast a 0.3 percent increase in the index.
The results of a survey by Markit Economics showed that private sector activity in the eurozone contracted at a slower pace in June, although the sector continued to contract. The composite purchasing managers' index measuring activity in the manufacturing and the service sector rose 1.2 points to 48.9 compared to expectations for a reading of 48.1. The manufacturing index rose 0.4 points to 48.7 and the service sector index moved up 1.4 points to 48.6. Country-wise, German manufacturing activity contracted at a faster rate, while the service sector moved into expansion zone. Meanwhile, France witnessed slower rate of contraction in both the manufacturing and the service sector.
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