Stock futures dip after Alcoa results, outlook

Stock index futures edged lower on Wednesday after Alcoa kicked off earnings season by warning of a slight slowdown in some markets, highlighting concerns about sluggish global growth, even as its quarterly results beat expectations.

Stronger demand for aluminum products from airplane and automobile producers helped Dow component Alcoa Inc's third-quarter profit beat analysts expectations, but it scaled back its global aluminum consumption outlook for 2012, citing the slowdown in China. Alcoa shares lost 0.7 percent to $9.07 in premarket trade.

Lackluster growth in China, the world's second-largest economy, is expected to rein in corporate earnings in the third quarter and dent profit forecasts as the Asian nation feels the pinch of the debt crisis in the euro zone, a key trading partner.

Earlier in the week, the World Bank cut its growth forecast for East Asia on concerns China's slowdown could last longer than expected.

"The slowing global growth story has always been an undercurrent that has been evident in the market place, but it was hard to take that fact and employ it inside of an investor trading strategy when you still had central banks flooding the world with cash and supporting asset prices," said Keith Bliss, senior vice president at Cuttone & Co in New York.

"So we are at an interesting inflection point in the market place where people could start focusing on the fundamentals and examine third-quarter earnings thoroughly" against a backdrop of slowing global growth and how that will impact the next few quarters' earnings and equity valuations, Bliss said.

Analysts forecast third-quarter earnings of Wall Street's S&P 500 companies would fall 2.3 percent from the year-ago quarter, according to Thomson Reuters data, which would be the first drop in U.S. quarterly earnings in three years.

According to data through Tuesday, 94 companies in the benchmark S&P index have issued negative outlooks, compared with 22 positive pre-announcements, for a ratio of 4.3, the weakest showing since the third quarter of 2001.

Going against general declines was Yum Brands Inc , which gained 3.8 percent to $68.53 in premarket trading. The KFC parent company had raised its full-year outlook after sales in China held up, despite that nation's cooling economy.

S&P 500 futures shed 0.6 point and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 37 points, and Nasdaq 100 futures lost 3.5 points.

Economic data expected Wednesday include wholesale inventories for August at 10:00 a.m. (1400 GMT) and the Federal Reserve's Beige Book of economic conditions at 2:00 p.m. (1800 GMT).

Chevron Corp dipped 1.6 percent to $115.50 in premarket after the second-largest U.S. oil company warned third-quarter profits would be "substantially lower" than in the previous quarter as a hurricane and maintenance curbed its oil and gas output and a fire hit its refining arm.

U.S. engine maker Cummins Inc lowered its 2012 forecast for a second time this year, citing delays in customer spending due to a weakening global economy, and said it would cut up to 1500 jobs.

Earnings from warehouse chain Costco Wholesale Corp were a bright spot; the company reported a 27 percent jump in fourth quarter profit, on higher sales and membership fees.

Coming on the heels of a 2013 profit forecast that was cut last month, FedEx Corp said it plans to slash costs at its underperforming express air freight and services divisions, with profit improvements of $1.7 billion planned at those operations over the next four years.

True Religion Apparel Inc surged 25.7 percent to $26.40 in premarket trading after the denim maker said it was evaluating strategic alternatives which could include a possible sale of the company, after receiving indications of interest from third parties.

European shares were lower for a third straight session, hurt by expectations of weak corporate results that may weigh on equity markets into next month.

Asian shares fell, with Japanese stocks sliding 2 percent to a two-month low, on concerns that the corporate results season will reveal weaker earnings in the face of flagging global economic growth.

(Editing by Bernadette Baum)