Stocks set to dip into the red

@CNNMoneyInvest November 22, 2011: 8:55 AM ET
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NEW YORK (CNNMoney) -- Stocks were poised to dip into the red Tuesday, after a government report showed that the economy grew at a slower pace than expected in the third quarter.

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

A weaker-than-expected estimate of economic growth in the third quarter caused futures to change direction early Tuesday. Futures had been pointing to a slightly higher open, after ratings agencies reaffirmed U.S. credit rating, despite the debt panel's failure to reach a budget deficit deal.

Congress' super committee, which had been given extra powers to tackle the country's seemingly intractable debt problems, admitted Monday that it could not agree on $1.2 trillion in budget reductions.

The collapse of budget talks could have longer-term ramifications, said Sebastian Galy, a senior currency strategist at Societe Generale, in a research note.

Debt committee failure: Red flag for investors

"The super-committee's failure didn't stress the rating agencies, but if payroll tax cuts can't be extended -- the risk of recession in 2012 goes up materially," Galy said. "And the 'better than expected' economic data we have been seeing becomes far less relevant, as we all peer through fog at the bleak outlook for 2012. And that makes the S&P look vulnerable or at least, well capped."

Stocks capped off a brutal day on Wall Street Monday, as investors remained on edge about debt problems in the U.S. and Europe.

All 30 Dow stocks finished Monday in the red, with the blue-chip index sliding into negative territory for the year. The S&P 500 and Nasdaq are both down roughly 5% for the year.

Economy: The economy grew at 2% annual rate in the third quarter -- a half-percentage point slower than originally reported, according to the government's second estimate of third-quarter GDP growth released Tuesday.

Eurobonds: The 'solution' that just won't stick

Analysts surveyed by Briefing.com expected the estimate would remain unchanged -- an annualized increase of 2.5%, following a 1.3% increase in the second quarter.

World markets: European stocks gained in morning trading. Britain's FTSE 100 (UKX) rose 0.4%, the DAX (DAX) in Germany edged up 0.2% and France's CAC 40 (CAC40) climbed 0.7%.

Asian markets ended little changed. The Shanghai Composite (SHCOMP) edged down 0.1%, the Hang Seng (HSI) in Hong Kong ticked up 0.1% and Japan's Nikkei (N225) slid 0.4%.

Tuesday afternoon, the Federal Reserve will release the minutes of its most recent policy meeting.

Companies: Shares of Netflix (NFLX) slumped more than 4% before the bell Tuesday, after the video-streaming subscription service announced it will sell $400 million in common stock and convertible notes.

Fusion-io (FIO) said it will price its public offering of 8.84 million in common stock at $33 per share, sending shares of the computer systems company 10% lower in premarket trading.

Hewlett-Packard (HPQ, Fortune 500) posted quarterly earnings and sales late Monday that fell from last year's results. Shares of the computer manufacturer fell more than 1% lower in premarket trading Tuesday.

Should you move out of the dollar?

Currencies and commodities: The dollar lost ground against the euro and the British pound, but rose versus the Japanese yen.

Oil for January delivery gained $1.19 to $98.11 a barrel.

Gold futures for December delivery jumped $16.20 to $1,694.80 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell slightly, pushing the yield up to 1.97% from 1.96% late Monday.  To top of page

Index Last Change % Change
Dow 30,932.37 -469.64 -1.50%
Nasdaq 13,192.34 72.91 0.56%
S&P 500 3,811.15 -18.19 -0.48%
Treasuries 1.46 -0.06 -3.82%
Data as of 8:35pm ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
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