Stock futures point to weaker start on Wall Street
NEW YORK -- Stock futures fell Thursday, pointing toward a weaker start to trading as a surge in oil prices tempered the optimism generated by the Federal Reserve's interest rate cut.
The Dow Jones industrial average climbed more than 130 points on Wednesday after the Federal Reserve lowered its benchmark interest rate by a quarter point to 4.50 percent. Investors had reason to rally: The central bank simultaneously loosened the money supply and suggested that strains on the financial markets Ã¢â‚¬â€ť and economy Ã¢â‚¬â€ť have eased.
But the Fed's move began a chain reaction that sent prices higher. Lower interest rates tend to undercut the dollar, which reached an all-time low against the euro following the Fed's decision. The dollar's tumble drove investors to the commodities market in search of a hedge: Oil prices surged above $96 a barrel in electronic trading overnight, while gold prices topped $800 an ounce.
The concern on Wall Street comes in part because Fed cautioned that higher energy and commodity prices could add to inflation pressures. Rising inflation could prevent the central bank from cutting rates further this year.
Dow futures fell 45.00, or 0.30 percent, to 13,891.00. Standard & Poor's 500 index futures shed 6.40, or 0.41 percent, to 1,548.50. Nasdaq 100 index futures lost 5.50, or 0.24 percent, to 2,247.00.
Treasury bond prices fell. The yield on the 10-year Treasury note, which moves opposite its price, rose to 4.48 percent from 4.47 percent late Wednesday.
Crude oil futures rose 98 cents to $95.51 in preopening trading on the New York Mercantile Exchange. Gold futures fluttered around $795 an ounce, as the dollar rebounded from its lows. The euro bought $1.4412 in early trading Thursday, off its $1.4503 peak.
Investors awaited another heavy day of earnings reports, as well as economic news including figures on pending home sales in September and weekly claims for unemployment benefits. Exxon Mobil Corp., world's largest publicly traded oil company, was among those scheduled to report results before the market open.
European markets moved lower. Britain's FTSE 100 fell 0.44 percent, Germany's DAX index shed 0.32, and France's CAC-40 declined 0.56 percent. In Asia, Japan's Nikkei stock average rose 0.79 percent, while Hong Kong's Hang Seng index rose 0.45 percent