Stocks: Investors on edge

@CNNMoneyInvest July 12, 2012: 8:44 AM ET
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NEW YORK (CNNMoney) -- U.S. stocks were headed for a lower open Thursday as fears about a global economic slowdown resurfaced.

Investors are worried that European leaders won't be able to make good on their most recent pledge to get a permanent bailout fund in place. And Wednesday's Fed minutes, which showed the central bank was wary of announcing any new stimulus measures anytime soon, is adding to the pessimism.

"The central banks are running out of options," said Mark Helweg, president of financial software company MicroQuant. "Where will we go from here? Negative interest rates?"

The Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were down about 0.7% early Thursday. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Concerns about the eurozone bailout fund, the European Stability Mechanism, weighed on European stocks. Implementation of the fund won't be quick, and a German high court's decision about whether that country's involvement violates its laws may not happen for months.

The initial euphoria from the recent European summit has faded, according to Gerry Davies, a ForexLive currency analyst in London.

"All that excitement has effectively evaporated," Davies said.

The euro fell below $1.22 to a fresh two-year low against the dollar. And the selling spilled over to commodities, with oil prices sliding more than 1%.

U.S. stocks closed lower Wednesday for the fourth day in a row.

World markets: European stocks were lower in morning trading. Britain's FTSE 100 (UKX) shed 1.1%, the DAX (DAX) in Germany lost 0.8% and France's CAC 40 (CAC40) slid 0.6%.

Asian markets ended mixed. The Shanghai Composite (SHCOMP) added 0.5%, while the Hang Seng (HSI) in Hong Kong fell 2% and Japan's Nikkei (N225) dropped 1.5%.

Economy: The Labor Department reported 350,000 people filed for first-time unemployment benefits during the week ended July 7 -- beating expectations and reaching a four-year low. The latest numbers showed a decrease of 26,000 from the previous week's 376,000.

Import prices excluding fuels dropped by 0.3% in June, according to the Bureau of Labor Statistics. Prices have continued to fall for most of the year so far.

At 2 p.m. ET, the Treasury Department will release its budget for June.

Companies: Groupon (GRPN) shares hit a fresh 52-week low in premarket trading, as investors continue to fret about the health of the online deals site.

Shares of Merck (MRK, Fortune 500) jumped more than 3% in premarket trading, after the pharmaceutical giant's osteoporosis drug Odanacatib showed positive results in the lab. The results caused outside observers to suggest that the company stop the study early.

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

Oil for August delivery fell 84 cents to $84.97 a barrel.

Gold futures for August delivery fell $10.30 to $1,565.40 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.49% from 1.50% late Tuesday.  To top of page

Index Last Change % Change
Dow 16,805.41 127.51 0.76%
Nasdaq 4,483.72 30.92 0.69%
S&P 500 1,964.58 13.76 0.71%
Treasuries 2.27 -0.00 -0.09%
Data as of 5:43pm ET
Company Price Change % Change
Ford Motor Co 13.78 -0.62 -4.31%
Microsoft Corp 46.13 1.11 2.47%
Apple Inc 105.22 0.39 0.37%
Bank of America Corp... 16.72 0.12 0.72%
Yahoo! Inc 43.50 0.90 2.11%
Data as of Oct 24
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.98%3.95%
15 yr fixed3.05%3.05%
5/1 ARM3.32%3.71%
30 yr refi4.05%4.03%
15 yr refi3.12%3.11%
Rate data provided
by Bankrate.com
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