4th May 2016 10:31
WASHINGTON (Alliance News) - Early indications suggest that Wall Street stocks may open Wednesday's session lower, as risk off mood persists. Even as the economic outlook remains murky, fed rate hike chatter is creating tension among traders. The inflow of mixed economic data and earnings is confounding the economic outlook further. Asian stocks ended lower earlier in the global trading day and the European markets are also languishing despite fairly positive domestic earnings.
Commodities are lower as the dollar finds its feet. The domestic markets may focus on earnings from companies such as Time Warner (TWX) and economic data on trade balance, quarterly productivity and costs, service sector activity and factory orders.
As of 6:15 am ET, the Dow futures are down 109 points, the S&P 500 futures slipping 14.50 points and the Nasdaq 100 futures are declining 31.75 points.
US stocks reversed course on Tuesday, as risk sentiment suffered from a few negative catalysts, including commodity retreat, weak overseas bank earnings and mixed domestic earnings.
On the economic front, ADP is set to release its private payrolls report for April at 8:15 am ET. Economists expect the private sector to have added 193,000 in April compared to 200,000 in March.
The Commerce Department is scheduled to release its trade balance report for March at 8:30 am ET. Economists expect a deficit of USD41.4 billion for the month. Also at 8:30 am ET, the Labor Department is due to release its preliminary first quarter productivity and costs report. The consensus estimates call for a 1.2% sequential drop in non-farm productivity but a 3.5% increase in unit labor costs.
The Institute for Supply Management will release the results of its national non-manufacturing survey for April at 10 am ET. Economists expect a reading of 54.7 for the month. Markit's final non-manufacturing PMI due to be released ahead of the ISM survey is expected to show a score of 52 for April.
Also at 10 am ET, the Commerce Department is set to release its factory orders report for March. Economists expect a 0.6% month-over-month increase in factory orders. The Energy Information Administration will release its petroleum status report for the week ended April 29th at 10:30 am ET.
In major corporate news, Avis Budget (CAR) reported a wider than expected loss for its first quarter, while its revenues exceeded estimates. The company's 2016 guidance is positive.
CBS (CBS) reported higher profits and revenues for its first quarter, helped by strong performance by its television network segment Cray (CRAY) reported a narrower than expected loss for its first quarter and revenues rose year-over-year. The company's full year and second quarter revenue guidance is weak.
21st Century Fox (FOXA), Allstate (ALL), Exelixis (EXEL), Fitbit (FIT), Hanover Insurance (THG), InterActiveCorp (IAC), Kraft Heinz (KHC), Lincoln National (LNC), McKesson (MCK), MetLife (MET), Prudential (PRU), Tesla Motors (TSLA), Transocean (RIG), Whole Foods (WFM), William Companies (WMB) and Zynga (ZNGA) are among the companies due to release their quarter results after the close of trading.
The major Asian markets sold off across the board, although the Japanese market remained shut for another public holiday. The Australian, Taiwanese and Singaporean markets were the worst hit.
Australia's All Ordinaries fell steeply in early trading and steadily thereafter. Subsequently, the index moved broadly sideways before ending down 79.40 points or 1.47% at 5,336. Hong Kong's Hang Seng Index ended down 151.11 points or 0.73% at 20,526, the lowest since April 12th. China's Shanghai Composite closed at 2,991, down 1.37 points or 0.05%.
On the economic front, the results of a survey by the Australian Industry Group showed that the service sector in Australia continued to contract in April. The corresponding index came in at 49.7, although up from 49.5 in March.
European stocks opened on a lackluster note, with the French and German markets seeing some upside in early trading in reaction to mostly positive domestic earnings. However, with commodities retreating, these markets have turned lower. The UK market is continuing to trade lower since the start of the session.
In major corporate news, Siemens (SI) reported better than expected second quarter profits, helped by cost cuts and strong order growth at its power business. Societe Generale also reported second quarter results that beat estimates and announced further cost cuts. Deutsche Telekom reported strong first quarter results, helped by gains on stake sale.
Anheuser-Busch InBev reported a decline in first quarter profit. Air France-KLM reported a narrower loss for its first quarter on lower fuel costs. Adidas said it would seek a buyer for its ailing golf business.
On the economic front, Markit's revised service sector PMI for the eurozone came in unchanged at 53.1 in April, but down from the flash estimate of 53.2. The service sector in Germany saw a slowdown in the pace of expansion, while the French service sector expanded for the first time in 3 months. The composite output index for the eurozone, which is a combined score for the manufacturing and the non-manufacturing sector, fell to 53 in April from 53.1 in March, in line with the flash estimate.
Meanwhile, the service sector in the UK saw a slowdown in the pace of expansion, according to data released by Markit and the CIPS. The index fell to 52 in April from 54.2 in March, while economists expected a more modest slowdown to 54.
A Eurostat report showed that retail sales in the eurozone fell for the first time in five months in March, dropping 0.5% month-over-month. Economists expected a more modest 0.1% drop.
Copyright RTT News/dpa-AFX