The major U.S. index futures are pointing to a nearly flat opening on Tuesday, with sentiment reflecting the uneasiness of traders due to a lack of clarity about the interest rate outlook. Two economic reports released a short while ago offered little direction. Retail sales growth for August was slightly softer than expected, although an upward revision to the previous month made up for the soft reading. At the same time, the New York Federal Reserve's regional manufacturing survey, which gives the first glimpse into manufacturing conditions for the month, showed pessimism.
The mood across the Atlantic is also jittery. The dollar is subdued. Traders now turn their attention to the Federal Reserve's industrial production report for August due in a short while from now.
U.S. stocks ended a lackluster session on Monday moderately lower, kick starting a data-heavy week that includes the FOMC announcement. The major averages opened slightly higher but turned lower immediately after. Thereafter, the averages languished in negative territory before ending in the red.
The Dow Industrials ended down 62.13 points or 0.38 percent at 16,371, the S&P 500 Index closed 8.02 points or 0.41 percent lower at 1,953 and the Nasdaq Composite closed at 4,806, down 16.58 points or 0.34 percent.
Twenty-five of the thirty Dow components closed lower, while the remaining five stocks advanced. Cisco Systems (CSCO), DuPont (DD), IBM (IBM), Microsoft (MSFT) and Visa (V) were among the biggest decliners of the session. On the other hand, Apple (AAPL) gained ground.
Among the sectors, resource and retail stocks came under selling pressure.
Currency, Commodity Markets
Crude oil futures are rising $0.24 to $44.24 a barrel after sliding $0.63 to $44 a barrel on Monday. Meanwhile, an ounce of gold is currently trading at $1,106.40, down $1.30 from the previous session's close of $1,107.70. On Monday, gold gained $4.40.
On the currency front, the U.S. dollar is trading at 120.09 yen compared to the 120.23 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1311 compared to yesterday's $1.1317.
Asia
Most Asian markets closed lower following the uninspiring lead from Wall Street overnight, the extended sell-off in the Chinese market and the uncertainty surrounding the Fed's monetary policy stance.
The Japanese market advanced moderately despite the Bank of Japan opting not to expand its quantitative easing program. Meanwhile, the Australia market experienced weakness after a changing of the guard in the government. Liberal Party legislatures elected Malcolm Turnbull as the country's Prime Minister after incumbent Tony Abbott was defeated in a vote of party lawmakers.
Australia's All Ordinaries opened little changed but declined through the remainder of the session before ending down 73.90 points or 1.44 percent at 5,047. The market witnessed broad based weakness, with material and financial stocks leading the slide.
China's Shanghai Composite Index slumped 109.63 points or 3.52 percent before ending at 3,005. Hong Kong's Hang Seng Index experienced volatility before ending 106.67 points or 0.49 percent lower at 21,455.
Meanwhile, Japan's Nikkei 225 Index, which was solidly higher in the morning session, gave back some ground in the afternoon, as the yen firmed up in reaction to the Bank of Japan's monetary policy announcement. However, the index ended up 60.78 points or 0.34 percent at 18,027.
Export stocks ended mostly higher and retail and utility stocks also gained ground. On the other hand, construction, real estate, steel, financial and telecom stocks retreated.
On the economic front, the Bank of Japan retained its stimulus program despite the domestic economy contracting in the second quarter.
The Policy Board of the BoJ governed by Haruhiko Kuroda decided by an 8-1 majority vote to maintain its target of raising the monetary base at an annual pace of about 80 trillion yen. In its comments on the economy, the bank downgraded its view on exports and industrial production, although it maintained its overall economic assessment.
The minutes of the Reserve Bank of Australia's September Monetary Policy Board meeting showed that policymakers feel the domestic economy is still sluggish enough to warrant additional stimulus. The bank highlighted lower resource exports and lagging commodity prices as deterrents to the economy.
Meanwhile, a report released by the Australian Bureau of Statistics showed that new motor vehicle sales in Australia fell 1.6 percent month-over-month in August following a 1.3 percent drop in July. However, on a year-over-year basis, motor vehicle sales improved 2.1 percent.
Europe
European stocks opened mixed and showed a lack of direction in early trading. The major averages in the region fell sharply in late morning trading and are currently uniformly lower.
In corporate news, U.K. home improvement retailer Kingfisher reported a decline in its first-half pre-tax profits on a decline in sales. The Netherlands' Philips said in an update on its performance that it continues to expect modest sales growth in 2015, helped by better operating performance. Yara announced it has signed non-binding Heads of Terms with Praxair to sell its European CO2 business for 218 million euros.
On the economic front, an inflation report released by the U.K. Office of National Statistics showed that U.K. annual consumer price inflation came in at 0 percent in August, in line with expectations. In July, inflation was at 0.1 percent. The monthly inflation of 0.2 percent was also in line with expectations.
A separate report showed that U.K. producer prices fell in August, with input prices declining 13.8 percent year-over-year and output prices falling a more modest 1.8 percent.
The results of the house price survey by the Office of National Statistics showed annual house price growth slowed to 5.2 percent in July from 5.7 percent in June, marking the weakest house price inflation in about 2 years.
Zew's survey showed worsening in German economic confidence in September, with the corresponding indicator declining to 12.1 from 25 in August, while economists expected a more modest drop to 18.3.
Eurostat reported that the eurozone's trade surplus swelled to 22.4 billion euros in July from 21.9 billion euros in June. Economists expected a surplus of 21.4 billion euros.
Data released by the European Automobile Manufacturers' Association showed that passenger car registrations rose 11.2 percent year-over-year in August, faster than the 9.5 percent growth in July.
French statistical office INSEE reported that the harmonized index of consumer prices in France edged up 0.1 percent year-over-year, while economists expected a 0.2 percent increase. On a monthly basis, the index was up a better than expected 0.4 percent.
U.S. Economic Reports
The New York Federal Reserve released the results of its regional manufacturing survey, which showed that manufacturing activity continued to contract in September, roughly at the same pace as in August.
The general business conditions index remained almost unchanged at -14.7 compared to -14.92 in August, while economists expected it to improve to -0.50 from. New orders and shipments continued to decline. The future general business conditions index also weakened.
The Commerce Department reported that retail sales rose 0.2 percent month-over-month in August following an upwardly revised 0.7 percent growth in July. The retail sales growth for August was slightly smaller than the 0.3 percent growth expected by economists.
Excluding autos, retail sales were up 0.1 percent compared to the upwardly revised 0.8 percent growth in July. The consensus estimate had called for 0.2 percent growth. Auto sales growth slowed to 0.7 percent from 1.3 percent. Furniture & home furnishing sales fell 0.2 percent.
Gasoline store sales fell 1.8 percent and building material & garden equipment store sales slumped 1.8 percent. On the other hand, electronic store sales rose 0.2 percent, reversing the 0.9 percent drop in July. Food & beverage store sales quickened.
The Federal Reserve is set to release its industrial production report for August at 9:15 am ET. The consensus estimate calls for a 0.2 percent month-over-month drop in industrial output, while capacity utilization is expected to edge down to 77.8 percent.
In July, industrial output rose 0.6 percent month-over-month, ahead of the 0.4 percent increase expected by economists. Manufacturing production rose a strong 0.8 percent. Capacity utilization climbed 0.3 percentage points to 78 percent.
At 10 am ET, the Commerce Department will release its business inventories report for July. Economists expect a 0.1 percent month-over-month increase in business inventories for the month.
Business inventories rose 0.8 percent month-over-month in June, while economists expected a more modest 0.3 percent increase. Business sales increased 0.2 percent compared to the previous month. The business inventories to sales ratio rose to 1.37 from 1.30 in the year-ago period.
Stocks in Focus
Sanmina (SANM) announced that its board has authorized a stock buyback program of up to $200 million worth of its stock.
Lockheed Martin (LMT) announced it received a $227 million contract from the U.S. Army for Lot 10 production of the Guided Multiple Launch Rocket System Unitary. This is the first order of GMLRS Alternative Warhead production.
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