| NEW YORK
NEW YORK Oct 12 U.S. stock index futures fell
on Tuesday as the dollar firmed and an official Chinese
newspaper confirmed the nation's central bank increased its
required reserve ratio for six banks.
* Six banks had been hit with a 50 basis point increase in
reserve requirements, the fourth hike this year, due to
excessive lending, China Securities Journal reported,
confirming a Reuters story Monday For details, see
[ID:nTOE69A05I] and [ID:nTOE69A03Y]
* The dollar rose against the euro and a basket of
currencies on a short-covering bounce ahead of the release of
minutes from the U.S. Federal Reserve's Open Market Committee
meeting from Sept. 21. The dollar index .DXY rose 0.3 percent
* "The dollar has really been the key driver in just about
all asset classes, including the market. It's all a function of
what our expectations are for quantitative easing come
November," said Arthur chief market analyst at Jefferies & Co
* The prospect of quantitative easing has created an
inverse correlation between the dollar and equities as
investors use the greenback as a trigger point to move into or
out of stocks. [ID:nLDE69B0OQ]
* "The biggest driver for the market today before we get
the Fed minutes and get into the meat of the earnings season is
the pace of the dollar, and that firming up has got us a bit of
a selloff," Hogan added.
* S&P 500 futures SPc1 lost 6.7 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 DJc1 fell 55
points, and Nasdaq 100 futures NDc1 shed 9.75 points.
* The Fed, which will release the minutes at 2 p.m. EDT
(1800 GMT), said after its Sept. 21 meeting it stood prepared
to provide more support for the economy but expressed concern
about low inflation.
* As the earnings season picks up steam, results are
expected from Intel Corp (INTC.O), railroad operator CSX Corp
CSX.N and industrial distributor Fastenal Co (FAST.O).
* European shares fell in early trading, tracking a decline
in Tokyo and depressed by a drop in mining stocks on the back
of a retreat in the price of copper and other metals. [.EU]
* Asian shares traded lower as indexes consolidated after
recent gains amid caution ahead of the corporate earnings
* U.S. stocks drifted in the lightest trading volume of the
year on Monday as few dared to place bets ahead of key company
results later this week.
(Editing by Jeffrey Benkoe)