By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- Stock futures traded choppy Wednesday,
on the heels of the worst day for major averages in months, but
investors were pinning some hopes for a reprieve on Federal Open
Market Committee minutes and the unofficial kickoff for earnings
season.
Futures for the Dow Jones Industrial Average (DJZ4) fell 13
points to 16,638, while those for the S&P 500 index (SPZ4) were
flat at 1,926.40. Futures for the Nasdaq-100 (NDZ4)(NDZ4) eased 1.5
points to 3,954.75.
(NDZ4)(NDZ4)As part of Tuesday's carnage, the S&P 500 (SPX)
dropped 1.5% to close at 1,935.1, and the Dow industrials (DJI) had
the worst day of selling in more than two months. Some investors
are concerned about the divergence between market caps, with the
Russell 2000 (RUT) small caps down 7.5% year-to-date, but the
S&P 500 still up nearly 5%.
Watch 200 DMA, watch Fed: The current weak spot for markets
could continue Wednesday, said Wouter Sturkenboom, a London-based
investment strategist at Russell Investment, in emailed comments.
However, he added that much will depend on the outcome of the FOMC
minutes, due at 2 p.m. Eastern Time. Split between hawks, doves to
be evident in Fed minutes
That is the only item on the data calendar. Sturkenboom said
investors will look to the start of earnings season to gauge
whether it will provide an up or down direction. Alcoa (AA), the
unofficial kickoff to the season, will report after the close on
Wednesday. What to expect from Alcoa's earnings
Sturkenboom said to keep an eye on the 200-day moving average
for the S&P 500 at 1,903, which could be a "possible inflection
point". He added, "If we find some solid ground we will buy the
dip," but said the small-cap retreat "looks set to keep going a bit
longer." Market's October backdrop remains bearish
Stocks to watch:Yum Brands Inc.(YUM) fell in late trading after
the company's profit and outlook missed estimates. The company
slashed expectations for full-year growth in earnings per share to
between 6% and 10%, from a prior estimate of at least 20%.
Kraft Foods Group Inc. (KRFT) could rise after the food company
said Tuesday it's raising its quarterly dividend to 55 cents a
share, from 52.5 cents.
Ahead of the open, Costco Wholesale Corp. (COST) surprised with
a 13% rise in profit on growth in same-store sales and higher sales
from membership fees.
Other markets: European stocks trended lower, with the German
DAX 30 dropping below the key 9,000 level. Stocks in Russia and
other emerging markets were also hit hard as Tuesday's growth
warning by the International Monetary Fund about the global economy
continued to reverberate. The case for not panicking over the
global slowdown
The global rout was felt in Asia, where the Nikkei 225 index
lost 1.2%.
Oil prices(CLX4) pushed another leg lower, trading around the
$87-dollar-a-barrel level. On Tuesday in New York it finished at
its lowest level for two years, also weighed by that IMF growth
call. Gold(GCZ4) rose as stocks continued to struggle.
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