S&P 500, Dow stocks drop on investor caution
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Thu, 24 Jul 2008 12:04:07 GMT |
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US (Business) |
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By Ellis MnyanduNEW YORK (Reuters) - The S&P 500 and Dow stock futures fell on Thursday as investors doubted stocks' recent bounce could be sustained and Dow Chemical said its profit missed Wall Street expectations, blaming higher energy prices.Nasdaq stock futures were little changed, gaining some support from Amazon.com Inc whose shares jumped nearly 7 percent before the bell a day after the Internet retailer beat Wall Street's profit forecasts.Automaker Ford Motor Co posted a wider-than-expected quarterly loss amid declining sales of large pickup trucks and sport utility vehicles in North America.U.S. stocks have been in rebound mode since the broader market made a new 2008 low about a week ago, driven mainly by a drop in oil prices and earnings from banks, beginning with Wells Fargo and including JPMorgan , the third-largest U.S. bank."There exists some apprehension and skepticism with regard to the recent rally we have had," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey. "There is fear that the problems that hang over the market remain."S&P 500 futures fell 6.40 points and were below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.Dow Jones industrial average futures dropped 47 points, and Nasdaq 100 futures gained 0.25 points.Oil prices rose slightly but held below $125 a barrel.In earnings news, Dow Chemical said its profit was hurt by a sharp spike in energy and raw material costs.Ford shares dropped more than 8 percent to $5.50 before the bell.There was some encouraging earnings news, nonetheless. Xerox Corp , the world's No. 1 supplier of digital printer and document management services, posted a stronger-than-expected quarterly profit and forecast full-year earnings above Wall Street's estimates. The company said it would buy back an additional $1 billion in shares.Federal Reserve Bank of New York President Timothy Geithner and Securities and Exchange Commission Chairman Christopher Cox are scheduled to testify before a House Financial Services Committee hearing on financial market regulation at 10 a.m.On the economic front, the Labor Department releases jobless claims for the recent week at 8:30 a.m. Economists in a Reuters survey forecast a total of 376,000 new filings compared with 366,000 in the prior week.The National Association of Realtors (NAR) releases existing home sales for June at 10 a.m. Economists in a Reuters survey forecast a 4.93 million annualized unit total versus 4.99 million annualized units in May.U.S. stocks rose on Wednesday as financial shares climbed on optimism about a rescue plan for mortgage finance companies Fannie Mae and Freddie Mac and as the price of oil fell.(Editing by Kenneth Barry)
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