NEW YORK (CNNMoney.com) -- Stocks were poised for a slightly weaker start, as investors digested data that showed Japan's economy slowed sharply last quarter. Traders are also awaiting reports on the housing markets and regional manufacturing.
After slight gains early in the week, stocks closed lower for four straight sessions last week beginning Tuesday after the Federal Reserve gave a bearish outlook and said the economic recovery is weakening. A raft of downbeat economic reports and some tepid earnings results added pressure.
"Investors are still in a bit of a shock from last week's severe drop," said Robert Brusca, chief economist at Fact and Opinion Economics. "Japan's worse-than-expected growth falls into the same pile of disappointing numbers we've been getting, and adds to the growing concern and uncertainty over the global economy."
World markets: While markets in Asia ended mostly higher, Japan's benchmark Nikkei index slipped 0.6% following reports that Japan's economic growth slowed sharply to 0.4% in the second quarter, showing that China is another step closer to becoming the world's third-largest economy.
Japan's gross domestic product totaled $1.29 trillion for the three months ending in June, while China's official figure for the same period was $1.34 trillion.
China is forecast to overtake Japan by the end of the year -- making China the world's No. 2 economy. However, official annual figures won't come until early 2011.
Meanwhile, the Shanghai Composite rallied 2.11%, while the Hang Seng in Hong Kong ended the day up 0.2%.
European shares were down in late morning trade. The CAC 40 in France dropped 0.6%, while the FTSE 100 in Britain slipped 0.2%. Germany's DAX also edged lower.
Economy: The Empire Manufacturing survey is due before the start of trading. The regional reading on manufacturing is expected to have jumped to 7.50 in August from 5.08 in July, according to a consensus of analysts polled by Briefing.com.
The National Association of Home Builders releases its August index of builder confidence in the market for new single-family homes today. The Housing Market Index is expected to hold steady at July's 14 points, the lowest level since April 2009.
Oil futures for September delivery rose 17 cents to $75.56 a barrel.
Gold futures for December delivery rose $7.60 to $1,224.20 an ounce.
Bonds: Prices for Treasurys were higher. The yield on the 10-year note fell to 2.65% from 2.68% late Friday. Bond prices and yields move in opposite directions.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.34%||3.50%|
|15 yr fixed||2.62%||2.65%|
|30 yr refi||3.39%||3.39%|
|15 yr refi||2.64%||2.67%|
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