Futures dip on weak corporate earns, Fed speak
Today’s news from the Associated Press was selected by Media Writing student Stephanie Jones.
NEW YORK (AP) — Weak earnings and what appears to be a growing consensus that the government can ease back on economic stimulus programs are pushing futures lower.
Dow Jones industrial futures gave up 47 points to 15,427. S&P futures fell 4.7 points to 1,689.20. Nasdaq futures slipped 6 points to 3,112.
U.S. markets suffered their worst decline since June after two officials with the U.S. Federal Reserve suggested Tuesday that a massive government bond-buying program could be relaxed.
Charles Evans, president of the Fed’s Chicago regional bank, who has strongly backed the program, said that the central bank is “quite likely” to trim bond purchases this year.
Evans qualified those comments saying that any action would depend on an improving economy.
Those comments echoed those of Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, earlier in the day.
The U.S. has been spending $85 billion every month to acquire bonds, which has kept interest rates at historic lows and induced active investments in the market.
Though neither of the Fed officials broke new ground with their comments, as has been seen in previous incidents, the markets took them as a cue to sell.
That sell-off appeared to continue Wednesday, and some weak earnings added more downward pressure.
Duke Energy reported a sharp fall-off in profit Wednesday for its most recent quarter with mild weather cooling demand for power, on top of the huge costs of shutting a nuclear plant in Florida.
Disney, which had a profitable quarter, fell in premarket trading after saying late Tuesday that it may take a loss on “The Lone Ranger,” which bombed at the box office.
First Solar is down 6 percent after falling short of Wall Street expectations. The company also cut its outlook.
The Federal Reserve is expected to report that consumers increased their borrowing in June. That report is due at 3 p.m. Eastern.