MADRID (MarketWatch) — U.S. stock-market futures drifted lower on
Tuesday, as investors grew jittery ahead of the unofficial kickoff of
third-quarter-earnings season later with Alcoa Inc. and with sentiment
dented by downbeat global-growth prospects from the International
Monetary Fund.
Futures for the Dow Jones Industrial Average
DJZ2
-0.04%
fell 6 points to 13,495, while those for the Standard & Poor’s 500 index
SPZ2
+0.0069%
fell 0.5 point to 1,449.30.
Futures for the Nasdaq 100 index
NDZ2
-0.29%
fell 7.25 points, or 0.3%, to 2,770.25.
Markets eye Europe, earnings
Shares fell, weighed by technology stocks, as investors fretted over a sluggish earnings outlook, debt-laden Europe and China's slowing economy. Steven Russolillo reports on the News Hub. (Photo: Bloomberg)
Geopolitical factors were also weighing, said Peter Cardillo, chief market economist with Rockwell Global Capital.
“Concerns over global growth and escalating tensions between Turkey and
Syria ahead of Alcoa’s earrings are likely to guide the market in a
non-event trading session,” Cardillo said in emailed comments.
Crude oil was higher after Turkey reportedly hit Syrian army positions on Monday.
No major economic reports are expected Tuesday, with focus mostly centered on Alcoa earnings, due after the closing bell.
Cardillo said he expects most sectors to meet or beat earnings
expectations on reduced estimates, and more companies to produce murky
guidance for fourth-quarter earnings
Yum Brands Inc.
YUM
+1.42%
will also report after the closing bell. The parent of fast-food chains
including Pizza Hut and KFC is expected to report profit of 97 cents a
share on sales of $3.66 billion, according to FactSet.
Wall Street stocks posted losses on Monday as investors braced for the
start of the reporting season. The Dow Jones Industrial Average
DJIA
-0.19%
fell 26.5 points, or 0.2%, to 13,583.65, halting a three-session winning run.
The S&P 500 index
SPX
-0.35%
fell 5.05 points, or 0.4%, to 1,455.88.
IMF
More worry on the global-growth front came from the IMF, which released
its World Economic Report in Tokyo on Tuesday. Citing lower growth
prospects and increased risks of another recession, the IMF cut its
estimate of 2012 growth to 3.3% from 3.5% and 2013 growth to 3.6% from
3.9%.
Read: IMF cuts 2012, 2013 global growth forecasts
“The headlines from that report were widely known,” said Victoria
Clarke, economist with Investec. “I’d be surprised if anyone had
expected anything else. Still, it’s unhelpful because it’s reminded
markets that the pickup in the global economy isn’t imminent.”
The IMF warned that a failure to get hold of Europe’s debt crisis or
tackle the impending “fiscal cliff” in the U.S. will worsen growth
prospects. It also said France, Spain and other euro-zone governments
will miss budget deficit targets.
Read: IMF: Key euro-zone nations to miss deficit targets
IMF gloom weighed on Europe stocks, as investors there also eyeballed a
European Union finance-ministers meeting in Luxembourg for more news on
the situations of Spain and Greece. The Stoxx Europe 600 index
XX:SXXP
-0.03%
fell 0.3%, with Spanish stocks leading the losses, down 1%.
Annalisa Piazza, strategist at Newedge, said she didn’t expect Spain
would present a formal bailout request Tuesday, something that markets
have been anticipating, given the continuation of the “wait-and-see
mode.”
“That said, the country will have to finance around €20 billion in bond
redemptions at the end of October, and its cash position is not in very
good shape,” said Piazza in emailed comments.
In other markets, gold for December delivery
GCZ2
+0.08%
fell $1.40 to $1,774.40 an ounce and oil for November delivery
CLX2
+0.88%
rose 29 cents to $89.63 a barrel.
The ICE dollar index
DXY
+0.07%
, which measures the dollar against a basket of six currencies, traded
at 79.760 versus 79.595 in late North American trading the prior
session.
Barbara Kollmeyer is an editor for MarketWatch in Madrid.