Wall Street Set For Weak Start On Economic Concerns

U.S. stock futures point to a lower opening Monday morning as traders fret over the possibility of double dip recession on mixed economic data. Slowdown in global economic growth following weaker than expected GDP data in Japan promoting China as the second largest economy in the world might also impact market sentiment. Economic data related to housing prices and manufacturing survey might be in traders’ focus.

As at 6.15 a.m ET, the Dow futures were down 14.00 points, the S&P 500 futures were down 1.90 points, and the tech-heavy Nasdaq 100 futures were down 2.00 points.

On the economic front, traders will focus on the results of the New York Federal Reserve’s empire state manufacturing survey for August, slated for release at 8:30 a.m.ET. Economists expect the headline general business conditions index to rise to 7.5 in August from 5.08 reported in July.

At 9.00 a.m. ET, the Treasury Department will release its report on net long-term flow of financial instruments for May.

At 10.00 a.m. ET, the National Association of Homebuilders will release the results of its survey on homebuilders’ confidence for August. Economists predict that the index remain at 14 for August, unchanged from the previous month.

Traders will be looking for more economic cues from the housing market, producer price index and industrial production during the course of the week for more clarity on the economic health.

In other global economic news, Japan has been dethroned as the second largest economy in the world by China, after Cabinet Office in Japan reported that its economy grew 0.4% annually in the second quarter, sharply lower than 2.3% growth expected by economists, and 4.4% annualized growth reported in the previous quarter.

In corporate news, Vedanta Resources Plc (VED.L), an India-focused natural resources company, said that it has agreed to acquire 51% to 60% of Cairn India Limited, a unit of Cairn Energy plc (CNE.L), for a total of about US$8.5 billion to US$9.6 billion in cash. The transaction, which would be a reverse takeover, is expected to close by the first quarter of 2011.

Before the market opens for trading, home improvement retailer Lowe’s Companies (LOW) will report its quarterly results.

Specialty retailer Urban Outfitters Inc (URBN) will report its quarterly earnings after the market close the trading session.

Oil Light sweet crude oil for September delivery is presently quoted at $75.67 a barrel, up $0.28 a barrel from its previous close of $75.39 a barrel in New York on Friday

Dollar The US dollar is trading weaker against the yen, but showing choppy trading against the euro and the pound.

World Markets Mixed trading was witnessed among the major markets in Asia. The markets in Australia, Japan, India, Singapore and South Korea ended in negative territory while the markets in China, Hongkong, and Taiwan ended in positive territory. The Cabinet Office in Japan revealed that the Japanese economy grew 0.4% annually in the second quarter, compared to 4.4% annualized growth in the first quarter. Analysts expected the economy to grow 2.3% in the second quarter. Following weak GDP numbers, Japan has been dethroned as the second largest economy in the world and China took that coveted position. Concerns about double-dip recession in the world’s largest economy following mixed economic reports in the past few months kept traders at the sidelines awaiting more decisive cues. The European markets pared much of the early gains and are presently trading in negative territory, dragged down by financials.

source:dailymarkets