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Stocks gear up for lower morning

By CNNMoney.com staff


NEW YORK (CNNMoney.com) -- U.S. stocks were headed for a lower open Wednesday, after the release of economic reports on trade and manufacturing, and Japan's decision to push down the yen's exchange rate.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were down ahead of the opening bell. Futures measure current index values against perceived future performance.

Foreign exchange rates are in the spotlight, after the Japanese government's first jump into the currency market since 2004. The yen rose to a fresh 15-year high against the U.S. dollar Tuesday, prompting recently re-elected Japanese Prime Minister Naoto Kan to intervene overnight to curb the yen's sharp rise.

The move boosted the dollar's strength early Wednesday, putting downward pressure on oil, which is priced in the U.S. currency around the world.

Stocks ended mixed Tuesday, as a recent rally on Wall Street ran out of steam. Investors welcomed a slightly better-than-expected report on U.S. retail sales, but the Dow and S&P 500 both closed lower, while the Nasdaq rose modestly.

Economy: Before the bell, the Federal Reserve Bank of New York said business conditions in the Mid-Atlantic region remained positive, although slightly slower than in July. Its business conditions index at 4.1. Economists had expected the index to fall no lower than 6.4, according to consensus estimates from Briefing.com.

The government also released a report before the bell that showed U.S. import prices increased 0.6% in August, driven by rising gas prices. Export prices rose 0.8% in the month.

Early Wednesday morning Alan Greenspan, the former Fed chairman, spoke at the Council on Foreign Relations in New York and called for the government to raise taxes.

Later in the morning, the government will report on how much industries are really producing -- compared to what they're capable of doing.

Economists expect that production rose 0.3% in August, after a more robust 1% gain in July, according to consensus estimates from Briefing.com. Capacity utilization is forecast to come in at 75%, versus 74.8% in July.

The manufacturing sector has been one of the sole bright spots against a backdrop of fears of a slower recovery. The sector has expanded for 13 straight months and in August, grew well beyond economist's expectations, according to a report by the Institute for Supply Management two weeks ago.

World markets: European shares fell in early trading. The CAC 40 in France fell around 0.8%, Germany's DAX edged down 0.7%, and Britain's FTSE 100 was 0.4% lower.

Asian markets ended mixed, with Japan's benchmark Nikkei index surging 2.3%. The Hang Seng in Hong Kong rose 0.1% and the Shanghai Composite fell 1.3%.

Currencies and commodities: The dollar rose against the euro and the British pound, and surged more than 2.5% against the Japanese yen.

Oil futures for October delivery fell $1.40 to $75.40 a barrel. The government's weekly crude oil inventory report comes out after the market opens.

Gold for December delivery fell $3.60 to $1,268 an ounce. On Tuesday, the December contract rose $24.60, or 2%, to settle at a record high of $1,271.70. That topped the previous record of $1,264.80 reached on June 21.

Bonds: The yield on the 10-year Treasury note rose to 2.71% from 2.67% late Tuesday. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.90%4.01%
15 yr fixed3.01%3.13%
5/1 ARM3.19%3.26%
30 yr refi3.98%4.12%
15 yr refi3.08%3.23%
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Index Last Change % Change
Dow 17,689.86 -56.12 -0.32%
Nasdaq 5,128.28 -0.50 -0.01%
S&P 500 2,103.84 -4.79 -0.23%
Treasuries 2.20 -0.06 -2.78%
Data as of 8:31am ET
Company Price Change % Change
Bank of America Corp... 17.88 -0.25 -1.38%
Micron Technology In... 18.51 -1.39 -6.98%
Facebook Inc 94.01 -1.20 -1.26%
Apple Inc 121.30 -1.07 -0.87%
Frontier Communicati... 4.72 0.09 1.94%
Data as of Jul 31

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