* China, euro zone threaten U.S.-led economic recovery
* Ebix plunges after Goldman affiliate merger called off
* Forest keen to bid for Irish drugmaker Elan
* Futures off: Dow 81 pts, S&P 14 pts, Nasdaq 25 pts
By Rodrigo Campos
NEW YORK, June 20 U.S. stocks were set to slide
at the open on Thursday, adding to a more than 1 percent drop a
day earlier, after Federal Reserve Chairman Ben Bernanke
outlined the start of a wind-down of stimuli that has been
instrumental to the market's rally.
Bernanke said Wednesday the U.S. economy was expanding
strongly enough for the Federal Reserve to begin slowing the
pace of its bond-buying stimulus later this year.
His comments triggered selloffs in markets that have been
supported by the Fed's $85 billion monthly asset purchases,
including Treasuries and U.S. equities. The U.S. dollar rose,
its strength continuing into Thursday's session.
"The market tends to overshoot and will continue to do so.
We'll probably see an overreaction to this," said Art Hogan,
managing director at Lazard Capital Markets in New York.
Even as Bernanke painted a rosier picture of the U.S.
economy than some expected, weaker factory output in China and a
continued recession in the euro zone kept investors concerned
about global growth, adding to pressure on stock markets
The number of Americans filing new claims for unemployment
benefits rose more than expected last week, but not enough to
signal a material shift from the recent pace of moderate job
"The data-dependant part (of Bernanke's remarks) should be
seen as a positive," said Hogan. But concern about Fed policy
"combined with the long-standing concern of a Chinese slowdown"
weighed on stock markets.
S&P 500 futures fell 14 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 fell 81
points, and Nasdaq 100 futures lost 25 points.
The S&P 500 is setting up to test support near 1,618, its
50-day moving average, and the lows from two weeks ago in the
Specialty drugmaker Forest Laboratories Inc is among
a handful of companies interested in bidding for Irish drugmaker
Elan Corp Plc , two people familiar with the
situation said. Elan's Irish shares were up 3.6
Walt Disney shares fell 1.8 percent in premarket
trading after Goldman Sachs removed the stock from its
"conviction buy" list.
Shares of Ebix Inc lost about half their value in
premarket trading a day after the insurance software provider
said that it and an affiliate of Goldman Sachs would
cancel their planned merger after U.S regulators started an
investigation into allegations of misconduct at Ebix.
At 10:00 a.m. EDT (1400 GMT), the National Association of
Realtors releases existing home sales for May. At the same time,
the Conference Board will release its report on May leading
economic indicators and a Philadelphia Fed survey is due on June