Stock futures slide on euro zone, fiscal worries
By Rodrigo Campos | November 10, 2012 12:35 AM EST
Stock index futures tumbled on Friday and were on track to post their worst weekly drop in five months as the euro zone crisis was seen hitting France and Germany and investors fretted over a looming U.S. "fiscal cliff."
Growth in Germany, Europe's largest economy, is likely to weaken in the next two quarters as firms postpone investments while France's central bank said it expected the euro zone's second-largest economy to slip into recession as 2012 ends.
In a speech at 1:05 p.m. EST (1805 GMT), newly reelected President Barack Obama is likely to discuss looming tax increases and government spending cuts - the so-called fiscal cliff - that would go into effect and possibly drive the U.S. economy into recession unless Congress acts to prevent them.
"We're going to get an initial reaction in the first five minutes of his speech," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
"The media is focusing on the fiscal cliff, I think, because Wall Street is focusing on it. Taxes really do matter and they change behavior."
The S&P 500 closed Thursday below its 200-day moving average for the first time in five months, a bearish technical signal that could keep stocks under pressure.
S&P 500 futures fell 10.4 points and were 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 102 points, and Nasdaq 100 futures lost 15.5 points.
The U.S. Labor Department releases import-export prices for October at 8:30 a.m. EST (1330 GMT). Economists in a Reuters survey forecast an unchanged reading for imports and a 0.2 percent rise in export prices.
Thomson Reuters/University of Michigan Surveys of Consumers will release preliminary November consumer sentiment index at 9:55 a.m. (1455 GMT). Economists expect a sentiment reading of 83.0 compared with 82.6 in the final October report.
On a more positive note, mostly dismissed by the market, Chinese data for October showed infrastructure investment accelerated and factory output ran at its fastest in five months.
(Editing by Bernadette Baum)
Most Popular Slideshows
- Dwyane Wade, Joe Johnson, Amare Stoudemire Among Worst Contracts In The NBA (Part 2 - Eastern Conference)
- Brawl-Marred Game in NFL Week 3: Philadelphia Eagles 37, Washington Redskins 34 [PHOTOS]
- NFL Monday Night Football Recap: Chicago Bears 27, New York Jets 19
- Reasons Why Michael Jordan Is Better Than LeBron James [PHOTOS And VIDEO]
Join the Conversation
- Nexus 6, 8 Release Date is Halloween 2014 as Android L Intro Set for October 16
- New Samsung Galaxy Note 4 and Galaxy S5 Android 5.0 L Killer Features, Encryption and More
- Moto G 2014 v Asus Zenfone 5 – Specification Comparison Shows Zenfone 5 Is A Good Alternative for Moto G
- Android 5.0 L Nexus 4, Nexus 5, Nexus 7 Release in October, Google Employees Offer Hint
- U.S and Canada Fighter Jets Chase Out Russian Jets Near Alaska: Air Space Violation Not Confirmed
- Apple iPad Air 2, OS X Yosemite Release Date Set For October, While iPad Mini 3 With Retina Headed For 2015 Release
- Microsoft Doubles OneDrive Space To 30GB Due To iOS 8 Update Issues