FOX Business: Capitalism Lives Here
After driving markets lower Tuesday afternoon, mounting concerns over stalled U.S. budget negotiations pressured stock-index futures Wednesday. Traders also awaited a batch of data on the housing market.
As of 7:55 a.m. ET, Dow Jones Industrial Average futures fell 34 points to 12828, S&P 500 futures slipped 5.3 points to 1392 and Nasdaq 100 futures slumped 7 points to 2634.
When Wall Street focuses on Washington, volatility often ensues. Such has been the case over the past several weeks. Markets got a boost last week on apparent progress in talks to avert the fiscal cliff -- spending cuts and tax hikes due at the the beginning of next year. However, the opposite effect has occurred over the past two days on word Congress may be deadlocked once again. Indeed, top lawmakers on both sides of the aisle pointed to limited progress and resorted to criticizing the other party.
Economists and political analysts broadly expect a deal to get done because the economic consequences would be so severe. However, the uncertainty over the shape and timing of a deal has in the past roiled financial markets, led ratings companies to threaten America's credit rating and weighed on consumer confidence.
"With just over four weeks to go, the mixed signals out of Washington yesterday are further reminders that talk alone (happy or otherwise) is insufficient in dealing with the fiscal cliff," analysts at Nomura wrote in a note to clients.
On the economic front, traders will get fresh data on the housing market. Sales of new homes are expected to have risen to an annualized pace of 390,000 units in October from 389,000 the month before. The closely-followed S&P/Case-Shiller report released Tuesday showed home prices in 20 major metropolitan markets having increased in September.
In general, data have pointed to continued recovery for the embattled housing market. However, economists are quick to point out that the rebound has come from very depressed levels.
At 2:00 p.m. ET, the Federal Reserve releases its Beige Book, an anecdotal report on the U.S. economy broken down by the 12 Fed districts. Economists will specifically be looking for the central bank's view of the economy, housing market, inflation and headwinds to growth. The report may have information on the impact of Hurricane Sandy as well, economists said ahead of the report.
Oil futures slumped for the third day in a row. The benchmark crude contract slipped 72 cents, or 0.81%, to $86.46 a barrel. Wholesale New York Harbor gasoline dipped 0.44% to $2.72 a gallon.
In metals, gold fell $7.30, or 0.42%, to $1,737 a troy ounce.
The Euro Stoxx 50 fell 0.47% to 2531, the English FTSE 100 dipped 0.2% to 5788 and the German DAX slumped 0.22% to 7316.
In Asia, the Japanese Nikkei 225 sold off by 1.2% to 9308 and the Chinese Hang Seng dropped 0.62% to 21709.