Futures Seek Direction; ISM Data on Tap

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Published July 02, 2012

| FOXBusiness

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U.S. stock-index futures wavered on Monday as traders digested a slew of economic data from Europe and Asia and awaited a report on the U.S. manufacturing sector.

Today's Markets

As of 8:27 a.m. ET, Dow Jones Industrial Average futures fell 13 points to 12795, S&P 500 futures dipped 0.25 point to 1356 and Nasdaq 100 futures slipped 2.3 points to 2608.

The markets closed out the second quarter with a big rally on Friday, with the S&P 500 zooming higher by 2.5%. The second half of the year has started off on a quieter note.

Chinese manufacturing accelerated at a slightly slower rate in June than the month before, according to the country's PMI gauge. That beat expectations of slight contraction. A private survey from HSBC pointed to a modest downturn for the month, but that also came in better than an earlier reading. 

"As external demand has weakened and domestic demand hasn't shown a meaningful improvement in response to earlier easing measures, growth is likely to be on track for further slowdown," Hongbin Qu, HSBC's chief economist, China, wrote in a research note. "But as inflation eases sharply, Beijing has plenty of room and policy ammunition to avoid a hard landing."

The contraction in eurozone manufacturing continued at the same pace in June as the month before. Germany, the bloc's economic powerhouse, saw its manufacturing activity slip to the lowest level in three years, yet another sign that Europe's debt crisis is beginning to infect increasingly major economies. 

A separate report showed unemployment in the eurozone having risen to a record of 11.1% in June from 11% in May.

The markets will also get a closely-eyed report from the Institute for Supply Management on the U.S. manufacturing sector at 10:00 a.m. ET. Economists expect the pace of expansion to have cooled down in June from May. The manufacturing sector has been a bright spot in an otherwise gloomy economy, but it has been showing signs of stress recently.

A report at the same time from the Commerce Department is forecast to show construction spending having ticked up by 0.2% in May from April. 

On the corporate front, Barclays (BCS) Chairman Marcus Agius resigned amid a scandal over the bank's manipulation of Libor, which is a key interest rate banks use when lending to each other. The rate is also used at a peg of trillions of dollars in global financial transactions. 

Micron Technology (MU) forged a deal to acquire rival Elpida Memory in a $2.5 billion deal. 

Oil futures were to the downside after soaring in the last session. The benchmark contract traded in New York fell $1.24, or 1.5%, to $83.69 a barrel. Wholesale New York Harbor gasoline dipped 1.6% to $2.589 a gallon. 

In metals, gold slid $12.70, or 0.79%, to $1,591 a troy ounce. 

Foreign Markets

The Euro Stoxx 50 jumped 1.1% to 2289, the English FTSE 100 gained 0.61% to 5605 and the German DAX rallied 1.1% to 6485. 

In Asia, the Japanese Nikkei 225 fell 0.04% to 9003 and the Chinese Hang Seng soared 2.2% to 19441.

 

 

URL

http://www.foxbusiness.com/markets/2012/07/02/stock-futures-seek-direction-manufacturing-data-on-tap/