By Anora Mahmudova and Sara Sjolin, MarketWatch
Housing starts dip in January; Producer prices drop
NEW YORK (MarketWatch) -- U.S. stock futures gave up overnight
gains and were flat shortly before the regular market open on
Wednesday.
Markets drifted lower after softer-than-expected housing and
inflation reports were released Wednesday morning. Investors are
eager to get a peek this afternoon at minutes from the Federal
Reserve's January meeting.
Meanwhile, any development to reach a debt deal between Greece
and its creditors is likely to influence market direction.
Paring back from earlier gains, futures for the Dow Jones
Industrial Average (DJH5) slipped 18 points to 17,983, while those
for the S&P 500 index (SPH5) fell 2 points to 2,093. Futures
for the Nasdaq-100 index (NDH5) were off 2 points to 4,379.
The muted action follows a slightly positive session on Tuesday,
when sentiment got some boost from reports that Greece may ask for
a six-month loan extension. The request is expected on Wednesday,
and the conditions of such an agreement are reportedly under
negotiation. Germany has already said it won't accept a mere loan
agreement without a formal extension of Greece's current bailout
program, including the strict austerity conditions attached. The
Global X FTSE Greece 20 ETF (GREK) dropped 2% ahead of the
bell.
See: Why the ECB's unlikely to cut off emergency funds to Greek
banks
Data: Kicking off an action-packed data day, the producer-price
index and housing-starts data.
U.S. wholesale prices posted a record 0.8% decline in January
after an unprecedented drop in energy costs, the Labor Department
said Wednesday. The drop was larger than expected. Meanwhile,
construction on new U.S. homes dropped 2% in January to an annual
rate of 1.07 million units, as heavy snowfall hindered builders in
some regions such as the Midwest and Northeast. The numbers matched
consensus forecast of economists polled by MarketWatch.
At 9:15 a.m. Eastern Time, industrial production is forecast to
show a 0.4% improvement in January, after a 0.1% drop in December.
Capacity utilization comes out at the same time, expected to have
risen to 79.9% in January, from 79.7% the previous month, according
to MarketWatch estimates.
FOMC minutes: The minutes from the Federal Open Market
Committee's meeting on Jan. 27-28 are due at 2 p.m. Eastern, in the
middle of the U.S. trading day. At the meeting, Federal Reserve
policy makers told investors they would be "patient" about hiking
short-term interest rates, and market participants will scrutinize
the minutes to see whether any of the top Fed officials actually
wanted to drop that phraseology.
Earnings: Reporting before the opening bell, hotel chain Hilton
Worldwide Holdings Inc. (HLT) said fourth-quarter adjusted earnings
rose to 17 cents, slightly missing analyst estimates. The company,
however, said it was optimistic about 2015. Shares seesawed
premarket and were down 0.7% at the latest.
Actavis PLC gained 2.5% ahead of the open after the
pharmaceutical firm raised its profit guidance for 2015.
As for companies reporting after the markets close, solar-power
company SolarCity Corp.(SCTY) is expected to post a quarterly loss
of $1.27 a share.
Marathon Oil Corp.(MRO) is seen delivering quarterly earnings of
4 cents a share.
Hotel operator Marriott International Inc.(MAR) is forecast to
report quarterly profit of 65 cents a share.
Movers and shakers: Rackspace Hosting Inc.(RAX) fell 3.5% in
premarket action after the cloud-computing company late Tuesday
posted a sharp increase in profit, but predicted first-quarter
revenue will be below Wall Street estimates.
Other markets: European stock markets moved firmly higher,
boosted by optimism that the Greek debt drama could soon come to an
end. Asian markets also got a lift from Greece and closed with
gains.
Crude-oil prices (CLH5) fell almost 2%, while metals prices were
mostly lower as well. The dollar (DXY) rose against most other
major currencies.
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