Stock futures fall as investors await reports

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Published: June 24,2010

Tags: investing, markets, stocks and bonds

NEW YORK — Stock futures fell today as investors brace for new economic and jobs reports that are expected to paint a mixed picture for the economy.

Investors moved into the safety of bonds for the third straight day, pushing interest rates lower. The dollar also strengthened as investors moved out of the euro again.

The Labor Department’s weekly report on unemployment claims is expected to show fewer people sought jobless benefits last week, but not enough to signal that employers are increasing the pace of hiring.

Initial jobless claims likely fell to a seasonally adjusted 460,000, from 472,000 the previous week, according to economists polled by Thomson Reuters. Claims have remained high in recent months, calling into question whether a strong, sustained recovery can occur without broad job growth. Claims would likely have to drop to around 425,000 to signal a strong jump in hiring.

A second report is expected to show orders for durable goods fell last month after a big jump in April. Economists expect orders for goods that last at least three years fell by 1.3 percent in May. The drop is likely due to a decline in commercial aircraft orders. Excluding the volatile transportation sector, orders are expected to have risen last month. Manufacturing has been one of the few areas of the economy that has shown consistent growth.

Both reports are due out at 8:30 a.m. EDT.

Ahead of the opening bell, Dow Jones industrial average futures fell 55, or 0.5 percent, to 10,184. Standard & Poor’s 500 index futures fell 6.60, or 0.6 percent, to 1,080.80, while Nasdaq 100 index futures fell 13.75, or 0.7 percent, to 1,860.00.

The unemployment and durable goods orders reports come a day after The Federal Reserve struck a more cautious tone about the pace of recovery in the U.S. and the Commerce Department said sales of new homes fell to the lowest level on record. Evidence has been piling up in recent weeks that the economy is growing, but not as fast as investors might have hoped for earlier this year.

The Dow was able to eke out a small gain of five points yesterday, but broader indexes fell.

The Fed said a recovery could be slow, hurt in part by weakness overseas. There are concerns that European countries facing mounting debt will have to slash spending so much that they stagnate the continent’s economy and that slowdown spreads around the globe. Those concerns have hurt the euro in recent months. The currency used by 16 countries was down to $1.2282 today.

Treasury prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.08 percent from 3.12 percent late yesterday.

Overseas, Britain’s FTSE 100 fell 0.7 percent, Germany’s DAX index dropped 0.6 percent, and France’s CAC-40 fell 1.1 percent. Japan’s Nikkei stock average rose 0.1 percent.

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