MADRID -- Stock futures were under water Tuesday, with Wall
Street set to open below major psychological levels, as fears that
the Federal Reserve could opt to taper its bond-buying program
early.
Auto makers will report sales, putting Ford Motor Co. and
General Motors Co. in the limelight.
Futures for the Dow Jones Industrial Average fell 48 points, or
0.3%, to 15951, while those for the Standard & Poor's 500 index
was off 4 points to 1795.70. Futures for the Nasdaq-100 index eased
4 points to 3479.
With no data on the calendar, investors will be waiting to see
if markets build on losses that came late Monday, briefly pushing
the Dow industrials below 16000. The index closed down 77.64
points, or 0.5%, to 16008.77. The S&P 500 index fell 4.91
points, or 0.3%, to close at 1800.90.
That reaction came as investors began to worry about whether the
record run for stocks has gotten too stretchy, and after a
sharper-than-expected rise in the Institute for Supply Management's
manufacturing index.
Jim Reid, strategist at Deutsche Bank, said the market has been
in a state of confusion after the ISM data provided "further fuel
to the taper flame.
"The best thing for markets longer-term is to have sustainable
growth and a normalization in monetary policy. However, over the
next 6-12 months we think markets would perform notably better if
sub-trend (but positive) growth and high liquidity continued," said
Reid.
"The latter scenario would be much less healthier longer-term,
though, as asset prices would deviate further from fundamentals,
leaving gap risk between the two. So with the recent strength in
the data ,we're building up to a fascinating payrolls this Friday
and one that could shape the early part of 2014," he added in a
note to clients.
The U.S. is forecast to add a net 180,000 jobs in November,
according to economists polled by MarketWatch. The unemployment
rate is seen dropping to 7.2%. Most economist don't think numbers
such as these will be enough to get the Federal Reserve to act by
the December meeting.
Europe extended losses a third day on Fed tapering fears. Data
showed a sharp drop in euro-zone producer prices, while the British
pound rose after upbeat U.K. construction data.
Asia stocks were a mix with Japan lifted by a weaker yen, but
Chinese shares extended Monday's selloff.
Gold prices eased and oil rose.
Write to Barbara Kollmeyer at AskNewswires@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
