Forexpros – U.S. stock futures pointed to a lower open on Wednesday, after Federal Reserve Chairman Ben Bernanke gave a bleak assessment of the U.S. economy and failed to point towards any near term monetary stimulus.
Investors also awaited a slew of corporate earnings from heavyweights such as Bank of America, American Express, IBM, eBay and Qualcomm.
Ahead of the open, the Dow Jones Industrial Average futures pointed to a loss of 0.3%, S&P 500 futures signaled a decline of 0.4%, while the Nasdaq 100 futures indicated a drop of 0.35%.
In testimony on the economy and monetary policy to the Senate Banking Committee on Tuesday, Bernanke said growth had lost momentum in the first half of the year and added that progress on cutting the U.S. unemployment rate was “frustratingly” slow.
However, he refrained from indicating whether the Fed would embark on a third round of quantitative easing to stimulate the economy, but reiterated that the central bank was prepared to take further action to support the economic recovery if necessary.
Market participants now looked ahead to Bernanke’s return to Capitol Hill later Wednesday to testify to the House Financial Services Committee.
Worries about the U.S. economy have been dominating market sentiment in recent weeks, alongside the ongoing debt crisis in the euro zone and China’s cooling growth.
The U.S. was to publish official data on building permits and housing starts later in the day.
In earnings news, shares in Bank of America were 0.9% higher in pre-market trade after the company said it earned USD2.46 billion in the second quarter, above expectations for income of USD2.35 billion. The bank lost 8.83 billion in the same quarter a year earlier.
Revenue totaled USD21.97 billion, missing street expectations for revenue of USD22.71 billion.
U.S.-listed shares of Credit Suisse surged 4% after reporting a 3.6% rise in net profit for the second quarter and said it aims to boost capital by CHF15.3 billion Swiss francs (USD15.6 billion) before year-end.
Abbot Laboratories and Honeywell International were also slated to release earnings before Wednesday’s opening bell, while American Express, IBM, eBay and Qualcomm report earnings after markets close.
After market closed Tuesday, chip giant Intel slashed its annual sales forecast, citing a slowdown in demand among consumers in the U.S. and Europe. Shares were down 1%.
Across the Atlantic, European stock markets were flat to higher. The EURO STOXX 50 rose 0.1%, France’s CAC 40 added 0.5%, Germany’s DAX eased up 0.1%, while Britain’s FTSE 100 was flat.
European equities came off their highest levels of the session after German Chancellor Angela Merkel said in an interview that she was not certain the European project would be successful, but reiterated that she was optimistic in spite of the current difficulties.
Earlier in the day, Germany auctioned more than EUR4 billion of two-year government bonds at negative yields for the first time at this type of auction, reflecting sustained investor concerns over the debt crisis in the region.
In the U.K., the minutes of the Bank of England’s July meeting showed that seven of the nine member monetary policy committee, including Governor Mervyn King, voted to implement a further GBP50 billion of stimulus measures, citing “very substantial risks” to the U.K. economy from developments in the euro zone.
Separately, official data showed that the unemployment rate in the U.K. unexpectedly ticked down to 8.1% in June from 8.2% in May as the London Olympics helped to create extra jobs.
During the Asian trading session, Hong Kong’s Hang Seng Index tumbled 1.3%, while Japan’s Nikkei 225 retreated 0.25%.
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