Stock futures drop as economic upheaval persists
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NEW YORK (Reuters) - Stock index futures fell on Tuesday, signaling that Wall Street would extend a worldwide equity slide fueled by concern that the global economic downturn is escalating.
Stocks slid across Asia overnight, and in Europe benchmark indexes were down 2 percent or more.
In the latest sign of the fallout from the economic upheaval, Chinese import growth slowed in October and inflation fell to a 17-month low as demand cooled.
On the corporate front, Starbucks Corp (SBUX.O) cut its plans for new international coffee shops and effectively cut its 2009 forecast after posting a steeper-than-expected slide in fourth-quarter profit.
Additionally, aluminum producer Alcoa Inc (AA.N) underscored the impact of faltering global demand by slashing a further 350,000 tonnes of aluminum-making capacity worldwide.
"There isn't necessarily any news that makes you feel more bullish," said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
"The only news that will likely push the market the other way is news that indicates on the part of companies that earnings streams are OK. Unfortunately the number of companies that can show that is probably slim."
S&P 500 futures dropped 15.40 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures declined 164 points, and Nasdaq 100 futures slid 23.50 points.
Faltering Chinese demand is a big blow to sentiment as investors had hoped that China would continue to see a roaring economy to mitigate the impact of faltering growth in the developed world.
Starbucks shares were down 1.02 percent in Europe.
Alcoa shares fell more than 4 percent to $11.27 before the bell. The aluminum producer, a Dow component, said it needed to make the cuts across its global smelting system because demand for aluminum was waning.
American Express Co (AXP.N) , the fourth-largest U.S. credit card issuer, is also among the stocks to watch after it won approval to become a bank holding company.
U.S. stocks fell in tepid volume on Monday, as investors fretted about the impact of a faltering economy on the outlooks of a raft of companies from General Motors GM.N to Goldman Sachs (GS.N).
