MW: U.S. stock futures point to second straight dip
LONDON (MarketWatch) -- U.S. stock futures on Wednesday pointed to a second straight day of declines, ahead of a slate of earnings from Wells Fargo and Morgan Stanley and an assessment of the economy from the Federal Reserve.
S&P 500 futures fell 5.7 points to 1,083.70 and Nasdaq 100 futures dropped 8.5 points to 1,749.70. Futures on the Dow Jones Industrial Average fell 47 points.
U.S. stocks on Tuesday returned a portion of the prior day's advance, with the Dow Jones Industrial Average down 51 points, the S&P 500 off 7 points and the Nasdaq Composite down 13 points. Disappointing economic data offset mostly well-received earnings updates from the likes of Caterpillar and Apple.
"Markets are being pulled between generally better corporate results, and occasional disappointments on the macro economic data. This is not perhaps unexpected, if the economic profile resembles the Nike 'swoosh' more than the classic V," said Paul Donovan, senior economist at UBS.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the U.S. equity rally from the lows of March can continue. He sees nominal GDP rising and unit labor costs declining next year.
"If we're right, the spread between sales and cost growth next year should be nearly six percentage points, which is consistent with S&P earnings rising by around 25%," he said. That would put the S&P 500 on a forward earnings multiple of about 14.2%.
"On that basis, it is hard to argue that U.S. equities are overvalued."
Wednesday's focus will turn to the Beige Book, the Fed's release of economic anecdotes from across the country at 2 p.m. Eastern.
Two more speakers from the Fed will take to the podium, and weekly energy inventories data will be released as oil futures traded above $78 a barrel.
The dollar was up vs. most rivals save the British pound, as minutes from the last Bank of England meeting showed unanimity in keeping unchanged its money-printing quantitative easing program.
Wednesday's wave of results include Altria (MO 18.66, +0.31, +1.69%) , Wells Fargo (WFC 30.46, +0.39, +1.30%) , Morgan Stanley (MS 32.52, -0.59, -1.78%) , Boeing (BA 51.89, -1.56, -2.92%) , and after the close, eBay (EBAY 25.06, -0.09, -0.36%) .
Yahoo (YHOO 17.17, -0.05, -0.29%) rose 4% in Frankfurt after it said its profit more than tripled as it clamped down on costs.
Deutsche Bank (DB 82.03, -1.30, -1.56%) declined in Frankfurt after forecasting a third-quarter profit well ahead of estimates due to tax gains.
Overseas, the Hang Seng slipped 0.3% as China Mobile dropped after lower-than-forecast profit, and the pan-European Dow Jones Stoxx 600 weakened 0.8%.
