Stocks to open lower on economic reports

@CNNMoneyInvest June 13, 2012: 9:00 AM ET
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NEW YORK (CNNMoney) -- U.S. stocks were set to open lower, as investors react to a disappointing producer prices report and await new details about Europe and trading losses at JPMorgan Chase.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures fell ahead of the bell on economic data. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Uncertainty in Europe also weighed on trading Wednesday morning. Investors will continue to watch Spain's troubled banks, whose exposure to bad real estate loans has led Fitch to downgrade 20 of them in the last two days.

Meanwhile, 10-year Spanish bonds are rising to unprecedented levels, even though European finance ministers agreed to give Spain up to €100 billion ($125 billion) in aid. Yields on Italian bonds also remained well above the 6% mark, despite a slight decline. Italy's auction of €6.5 billion worth of one-year notes came in at a rate of 3.97%.

A survey from CNNMoney of 20 investment strategists and money managers suggests that the S&P 500 could rise more than 8%, from its current level above 1,430 -- which means a 14% gain for the year.

U.S. stocks rose Tuesday, recovering the previous day's losses. All three indexes closed up more than 1% in what analysts said was a relief rally in response to Monday's sell-off. Bank stocks were among the biggest winners, with shares of Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) rising more than 2%, after sharp declines in the sector on Monday.

The banking sector will be in the spotlight Wednesday, starting at 10 a.m. ET, when JPMorgan CEO Jamie Dimon testifies before Congress. Prepared remarks released late Tuesday show Dimon will blame insufficient risk controls and a failure by traders to understand the bets they were placing for the loss.

Losses appear to be mounting, and sources tell CNNMoney that what originally reported as a $2 billion loss may have grown to as much as $8 billion. Details on the size of the loss and comments on the need for more regulation during the hearing could hurt shares in the banking sector.

World markets: European stocks were lower in midday trading. Britain's FTSE 100 (UKX) and France's CAC 40 (CAC40) edged down 0.2%, while the DAX (DAX) in Germany lost 0.6%.

Asian markets ended higher. The Shanghai Composite (SHCOMP) gained 1.3%, while the Hang Seng (HSI) in Hong Kong rose 0.8% and Japan's Nikkei (N225) ended 0.6% higher.

Economy: Investors sold-off in premarket trading after a disappointing report on producer prices was released Wednesday.

The Producer Price Index, which measures changes in wholesale prices, dropped 1% in May. Economists surveyed by Briefing.com had expected a decline of 0.7%.

The government's estimates on retail sales for May showed a decline of 0.2%. This was close to expectations from economists surveyed by Briefing.com.

The monthly report on April business inventories is on tap for 10 a.m. ET. Inventories have increased in recent months, and economists surveyed by Briefing.com expect growth of 0.2%.

The Energy Information Agency's report on crude inventories will be released at 10:30 a.m. ET. Oil prices have swung wildly lately, due to political and economic uncertainty around the globe.

Companies: Computer maker Dell (DELL, Fortune 500) said Tuesday that it will start paying dividends to shareholders later this year, boosting its stock by 3% in premarket trading.

Philip Morris International (PM, Fortune 500) announced an $18 billion share repurchase plan Wednesday. Shares of the company, which was spun off from domestic tobacco company Altria Group (MO, Fortune 500) in 2008, are up 8% year-to-date.

Shares of Dow component Johnson & Johnson (JNJ, Fortune 500) were up 2% in heavy pre-market trading. The company disclosed after the close Tuesday that it will be able to complete its purchase of Swiss medical device maker Synthes on Thursday, much sooner than expected. It also said the deal will add 3 to 5 cents a share to its earnings this year, rather than shave 22 cents a share off its profits as it previously forecast.

Currencies and commodities: The dollar fell against the euro, but gained strength against the British pound and Japanese yen.

Oil for July delivery fell 92 cents to $82.40 a barrel.

Gold futures for August delivery rose $7.70 to $1,621.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged up, pushing the yield down to 1.66% from 1.67% late Tuesday.  To top of page

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