U.S. stock futures posted hefty losses Wednesday, pointing to a lower start for Wall Street after minutes of the latest Federal Reserve policy meeting dented global risk appetite and investors awaited further clues to the pace of job creation by the U.S. economy.
Futures on the Dow Jones Industrial Average DJM2 -0.69% fell 90 points to 13,042. S&P 500 Index futures SPM2 -0.70% lost 10.7 points to 1,398.10, while Nasdaq-100 futuresNDM2 -0.60% declined 19.5 points to 2,759.50.
European stocks posted a sharp fall, following through on a drop in overall investor risk appetite after the minutes of the latest meeting of U.S. Federal Reserve policy makers damped hopes for a further round of monetary stimulus. Europe Markets
Stocks sink after Fed minutes
Stocks end Tuesday down from multiyear highs after the Federal Reserve's most recent meeting minutes were released.
Final euro-zone purchasing managers’ index readings for March indicated that business activity across the region likely contracted in the first quarter of the year, while an auction of Spanish government debt saw borrowing costs rise and demand weaken in the country’s first test of the credit markets since the presentation of an austerity budget last week.
The Fed minutes were credited with sending U.S. stocks to a lower finish on Tuesday, with the Dow industrials breaking a three-session winning streak.U.S. stocks take hit from Fed
“The selloff has continued this morning and is a broad-based ‘risk off’ reaction to the Fed news,” said Fawad Razaqzada, market strategist at GFT.
Attention now turns to U.S. employment numbers as investors await the release of human-resources firm Automatic Data Processing’s estimate of March private-sector payroll activity at 8:15 a.m. Eastern time. The figures are watched for clues to the Labor Department’s coming March nonfarm payrolls data and other labor market figures.
If the jobs data disappoint, the situation is reversed, Razaqzda said. “Either way, the real issue is whether the U.S. economy is now robust enough to prosper without central bank intervention or not.”“If the jobs data [are] strong, then this will reinforce the belief that the Fed will hold off from providing further stimulus in the short-term. This makes things tricky for investors: do they continue to buy stocks on improving U.S. data, or sell out as further Fed intervention looks unlikely?” Razaqzada said.
The Institute for Supply Management’s March services gauge is set for release at 10 a.m. Eastern. It’s forecast to fall to 56.8% from 57.3% in February.
The Labor Department will release March labor data on Friday, when most U.S. markets are closed for Good Friday. Economists surveyed by MarketWatch expect March payrolls to grow by 200,000 after a 227,000 rise in February. The unemployment rate is forecast to decline to 8.2% in March from 8.3%.
The Dow closed Tuesday down 64.94 points at 13,199.50. The S&P 500 SPX -0.40%closed 5.88 points lower at 1,413.16, while the Nasdaq Composite COMP -0.20% lost 6.13 points to 3,113.57.
The fall in overall risk appetite was credited with pressuring oil futures, with Nymex crudeCLK2 -0.62% down 72 cents at $103.29 a barrel in recent action. Gold futures GCJ2 -2.11%dropped $36.70 to $1,633.30 an ounce.
The dollar index DXY +0.28% rose 0.1% to 79.601. The euro fell 0.4% versus the dollarEURUSD -0.5335% to $1.3175. The U.S. unit USDJPY -0.7255% fell 0.7% versus the Japanese currency to 108.34 yen.
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