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U.S. futures lower on Fed disappointment; Dow Jones down 0.24%

Published 06/21/2012, 07:05 AM
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Investing.com - U.S. stock futures pointed to a lower open on Thursday, as market sentiment waned after the Federal Reserve stopped short of launching a third round of quantitative easing, while concerns over the debt crisis in the euro zone also continued to weigh.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a fall of 0.24%, S&P 500 futures signaled a 0.27% decline, while the Nasdaq 100 futures indicated a 0.25% loss.

Investor confidence weakened after the Federal Reserve announced Wednesday that it is extending the current bond buying program until the end of the year, disappointing expectations for more aggressive measures, following a recent string of weak U.S. data.

Sentiment was also hit after data showed that manufacturing activity in the euro zone contracted at the fastest pace since June 2009 this month, while manufacturing activity in Germany slowed to the lowest level in three years in June.

The dismal data came after a report showing that China’s HSBC PMI for June fell to 48.1 compared with 48.4 in May, remaining in contraction territory for the eighth straight month.

Computer technology companies were expected to be active after a U.S. judge strongly questioned Apple's bid for an injunction against Google's Motorola Mobility unit, as the iPhone maker tries to salvage its position on a key front in the smartphone patent wars. Apple shares were down 0.38% in pre-market trade, while Google edged up 0.07%.

Meanwhile, Johnson & Johnson was also likely to be in focus, as the healthcare giant was reportedly approaching a settlement with the U.S. Justice Department over allegations it promoted anti-psychotic drug Risperdal for unapproved uses that could cost the healthcare conglomerate at least USD1.5 billion.

In the same field, Ligand Pharmaceuticals rallied 3.78% in late trading after surging over 12% on Wednesday, as a partner won U.S. approval for a cancer drug.

In the financial sector, Wells Fargo, the fourth-largest U.S. bank by assets, was said to be thinking of moving some jobs outside the U.S. as it pushes forward with a company-wide cost-cutting program.

Elsewhere, Bed, Bath & Beyond and Red Hat were expected to move on Thursday, after both companies announced disappointing second-quarter earnings forecasts.

Tobacco company Philip Morris International saw shares drop 0.69% in pre-market trade after cutting its 2012 growth forecast on Wednesday.
Other stocks in focus included ConAgra Foods, Carnival Corp and Apollo Group, all due to report results later in the day.

Across the Atlantic, European stock markets were lower. The EURO STOXX 50 fell 0.36%, France’s CAC 40 dropped 0.56%, Germany's DAX declined 0.40%, while Britain's FTSE 100 retreated 0.62%.

During the Asian trading session, Hong Kong's Hang Seng Index fell 0.8%, while Japan’s Nikkei 225 Index rose 0.8%.

Later in the day, the U.S. was to produce government data on unemployment claims, followed by preliminary data on manufacturing activity and an industry report on existing home sales. The country was also to release data on manufacturing activity in the Philadelphia area.


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