NEW YORK -
Stock index futures edged lower on Wednesday after Alcoa kicked off earnings season by warning of a slight slowdown in some markets, highlighting concerns about sluggish global growth, even as its quarterly results beat expectations.
Stronger demand for aluminum products from airplane and automobile producers helped Dow component Alcoa Inc's
Lackluster growth in China, the world's second-largest economy, is expected to rein in corporate earnings in the third quarter and dent profit forecasts as the Asian nation feels the pinch of the debt crisis in the euro zone, a key trading partner.
Earlier in the week, the World Bank cut its growth forecast for East Asia on concerns China's slowdown could last longer than expected.
"The slowing global growth story has always been an undercurrent that has been evident in the market place, but it was hard to take that fact and employ it inside of an investor trading strategy when you still had central banks flooding the world with cash and supporting asset prices," said Keith Bliss, senior vice president at Cuttone & Co in New York.
"So we are at an interesting inflection point in the market place where people could start focusing on the fundamentals and examine third-quarter earnings thoroughly" against a backdrop of slowing global growth and how that will impact the next few quarters' earnings and equity valuations, Bliss said.
Analysts forecast third-quarter earnings of Wall Street's S&P 500 <.SPX> companies would fall 2.3 percent from the year-ago quarter, according to Thomson Reuters data, which would be the first drop in U.S. quarterly earnings in three years.
According to data through Tuesday, 94 companies in the benchmark S&P index have issued negative outlooks, compared with 22 positive pre-announcements, for a ratio of 4.3, the weakest showing since the third quarter of 2001.
Going against general declines was Yum Brands Inc
S&P 500 futures shed 0.6 point and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 37 points, and Nasdaq 100 futures lost 3.5 points.
Economic data expected Wednesday include wholesale inventories for August at 10:00 a.m. (1400 GMT) and the Federal Reserve's Beige Book of economic conditions at 2:00 p.m. (1800 GMT).
U.S. engine maker Cummins Inc
Earnings from warehouse chain Costco Wholesale Corp
Coming on the heels of a 2013 profit forecast that was cut last month, FedEx Corp
True Religion Apparel Inc
European shares were lower for a third straight session, hurt by expectations of weak corporate results that may weigh on equity markets into next month. <.EU>
Asian shares fell, with Japanese stocks sliding 2 percent to a two-month low, on concerns that the corporate results season will reveal weaker earnings in the face of flagging global economic growth.
(Editing by Bernadette Baum)