Stock Futures Point to Moderately Lower Open
U.S. stock futures pointed to a moderately lower open for Wall Street on Thursday after a unexpectedly downbeat China data, as investors readied for U.S. consumer prices, and a couple of a manufacturing indexes among other data.
Shares of Facebook Inc. are expected to come in the spotlight after the company stunned Wall Street with a deal to buy Internet-based mobile texting app WhatsApp. Wal-Mart Stores Inc. is on tap to report earnings ahead of the bell.
Futures for the Dow Jones Industrial Average fell 15 points to 16001, while those for the S&P 500 index eased 2 points to 1823.50. Futures for the Nasdaq 100 index fell 4.5 points to 3650.
A packed data calendar kicks off with weekly jobless claims, which Wall Street will be watching for larger clues on labor market trends, as well as consumer prices, both due at 8:30 a.m. EST. Inflation at the consumer level is expected to stay on the quiet side for January, rising a seasonally adjusted 0.1%, according to economists polled by MarketWatch.
While manufacturing reports have been coming in around the globe, the U.S. will get its own share of data for the sector on Thursday. The Markit Flash purchasing managers index and Philadelphia Federal Reserve's own index are both expected to show a slower pace of production for February.
The Philly Fed, due at 10 a.m. EST, is viewed as most important and economists expected the index to drop to 7.3 in February from 9.4 in January. The Markit index is due at 9 a.m. EST.
Leading indicators will be released at 10 a.m. EST.
There remains an element of Federal Reserve minutes hangover. Stocks closed lower on Wednesday after the minutes showed no real consensus about when short-term rates would begin to rise. The S&P 500 index (SPX) broke a three-day winning streak, losing 12.01 points to close at 1828.75.
The minutes also revealed a few Fed officials indicating the possibility that raising short-term interest rates "relatively soon" might be appropriate. "Some hawkish Fed officials love tapering more than sharks love blood, and this is what we have seen from the minutes released yesterday," said Naeem Aslam, chief market analyst at Ava Trade, in emailed comments.
Also weighing on sentiment Thursday is a contraction in Chinese manufacturing. The HSBC/Markit preliminary version of its monthly manufacturing PMI index fell to 48.3, which missed a forecast of analysts polled by Bloomberg News for the index to stay at January's 49.5. A level below 50 suggests contraction.
"If you were thinking that the recent increase in lending by the PBOC has changed the arena, then clearly investors have misplaced their optimism, because the Chinese PMI data came earlier and today's data, are sharply skewed towards the weak economic growth," Mr. Aslam said.
Some economists were dubious over the data, saying it may not be revealing the whole picture.
Asia stocks fell, with the Hang Seng index down 1.2%, while the Nikkei 225 index fell 2.2%, weighed by a stronger yen. Europe stocks were in the red after business activity in the euro zone sputtered due to weakness in France.
Ahead of the bell, Wal-Mart (WMT) is due to report fourth-quarter results, with a consensus survey by FactSet calling for earnings of $1.59 a share.
Stocks expected to be active in premarket include Facebook (FB) announced $16 billion WhatsApp deal, with some speculation that maybe the company paid too much. Shares of Facebook fell 2.5% in thin premarket trading.
Tesla Motors Inc. (TSLA) shares could get another premarket lift after soaring 10% in late trade as the company swung to an adjusted profit in the fourth quarter.
Safeway Inc. (SWY) may add to late-session gains after it said it's holding talks on the possible sale of the company, though no deal has yet been reached.