By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.S. stock futures slumped Thursday, as
markets assess economic data and the Federal Reserve's intentions
ahead of wrapping up the month of July.
Investors will get financial updates from oil majors Exxon Mobil
and Conoco Phillips, and weekly labor-market data ahead of the
widely anticipated July jobs report.
Futures for the Dow Jones Industrial Average (DJU4) dropped 107
points, or 0.6%, to 16,714, and those for the S&P 500 index
(SPU4) fell 14 points, or 0.7%, to 1,950. Futures for the Nasdaq
100 index (NDU4) gave up 30 points, or 0.7%, to 3,939.
"The markets seem to be digesting a lot of the data from
[Wednesday] along with the Fed statement. Even though there is a
good chance we'll see a revision to what was a surprisingly good Q2
GDP number, this does raise the spectre of monetary tightening in
less than a year," said Brenda Kelly, chief market strategist at
IG, in emailed comments.
Equities are also feeling the pinch from a selloff in government
bonds that's left the yield on the 2-year note (2_YEAR) at its
highest level since May 2011, said Kelly.
Concerns about the health of Europe's banking sector may drag on
Wall Street, as shares of Banco Espírito Santo SA in Lisbon sank as
much as 50%. The shares had been suspended after the Portuguese
lender reported a record second-quarter loss. The loss came as the
bank's troubled parent company, Espirito Santo International, found
ways to use the bank to raise funds that are largely
unrecoverable.
At 8:30 a.m. Eastern Time, the Labor Department releases its
weekly jobless claims report, with the number of Americans who
filed new applications for unemployment benefits last week expected
to rise to about 308,000 by economists surveyed by MarketWatch. Due
the same time, the Labor Department's employment cost index, which
measures how much companies pay in wages and benefits, is projected
to climb a modest 0.5% in the second quarter.
Even with the expected rise in jobless claims, the labor market
is still strengthening, as the economy has added more than 200,000
jobs a month for five consecutive months. On Friday, the July
nonfarm-payrolls report is projected to show a gain of 230,000
jobs.
A reading on July business conditions in the Chicago area is due
at 9:45 a.m. Eastern Time, and economists are looking for the
Chicago PMI to rise to 63.5, from 62.6 in June.
On the corporate front, Conoco Phillips (COP) reports earnings
before the bell and is projected to post per-share earnings of
$1.60 for its second quarter, according to FactSet.
Exxon Mobil (XOM) is expected to report adjusted second-quarter
earnings of $1.86 a share.
Pharmaceutical distributor McKesson's (MCK) earnings are
projected to come in at $2.33 a share.
U.S.-listed shares of Nokia Oyj (NOK) may be active after Nokia
Networks agreed to buy a part of Panasonic's wireless networks
business for an undisclosed amount.
In the commodities market, crude-oil futures (CLU4) fell below
$100 a barrel on bearish U.S. inventory data, while gold futures
(GCQ4) edged higher.
European stocks were lower, and Asian equities closed mixed,
with Japan's Nikkei Average closing down 0.2%.
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