US stock futures point to modestly lower open as investors wait for Fed decision on rates
NEW YORK -- U.S. stock futures fell Tuesday, indicating a lower start to the regular session, as the Federal Reserve prepares to start a two-day meeting on interest rates.
Wall Street has been calling for a rate cut following the Fed's half-point reduction in September, and investors widely expect the central bank to deliver a quarter-point cut a the meeting's conclusion on Wednesday. But inflation remains a threat, with oil prices near record highs and the dollar in sharp decline, and there is no certainty the Fed will lower interest rates.
The price of commodities from crude oil to corn has risen as the dollar has lost ground to other currencies, adding to the appeal of raw materials as an investment. But higher commodity prices spell inflation in other areas, from gas prices to food prices. However, those arguing for lower interest rates say such a stimulant is needed to prevent a housing slump and credit market troubles from hurting economic growth.
United States Steel Corp. on Tuesday said third-quarter earnings dropped nearly 36 percent as concerns about the economy's strength affected its major markets, leading the steelmaker's results to miss Wall Street expecatations.
Dow Jones industrial average futures lost 35.00, or 0.30 percent, to 13,872.00. Standard & Poor's 500 index futures fell 5.40, or 0.35 percent, to 1,541.60. Nasdaq 100 index futures fell 9.00, or 0.41 percent, to 2,206.50.
The Dow rose about 64 points on Monday, while broader stock indicators also advanced.
Bonds prices fell on Tuesday. The yield on the 10-year Treasury note, which moves inversely to its price, rose to 4.40 percent, up from 4.38 percent late Monday.
In commodities, oil prices retreated after climbing near $94 a barrel on Monday amid concerns about tight supplies in the U.S. and rising tensions in the Middle East. Gold prices dipped.
Investors are also awaiting the latest reading on consumer confidence, due from the Conference Board at 10 a.m. EDT.
Two major consumer products companies posted stronger earnings Tuesday.
Procter & Gamble Co. Ã¢â‚¬â€ť which makes including Tide detergent, Crest toothpaste and other products Ã¢â‚¬â€ť said fiscal first-quarter profit rose 14 percent on strong sales growth across most regions. Colgate-Palmolive Co. posted a 22 percent jump in third-quarter earnings on robust sales of its home and family care products and improved cost controls.
Overseas, European markets moved lower, while Asian markets ended mixed.
Britain's FTSE 100 fell 0.65 percent, Germany's DAX index dropped 0.46, and France's CAC-40 dipped 0.56 percent. Japan's Nikkei stock average fell 0.28 percent, and Hong Kong's Hang Seng index rose 0.16 percent.