Stock futures point to lower opening
Stephen BernardStocks are set to continue their slide when the market opens Friday as the dollar strengthens further, and after a week of mixed economic reports. Futures are lower.
Overseas markets declined. European Central Bank President Jean-Claude Trichet said the ECB plans to start pulling back some of its stimulus programs as the economy begins to recover.
With little U.S. economic news to help sway the market Friday, the dollar is again pressuring stocks. A strengthening dollar drives down foreign demand for commodities, which are often traded in dollars. It also can depress U.S. exports which become more expensive as the dollar rises.
That can hurt the price of energy and materials stocks that are closely tied to commodities and companies with large operations overseas.
A disappointing earnings report from computer maker Dell Inc. is also weighing on the market. Dell said after the market closed Thursday that sales of its computers to big businesses remain sluggish. Its quarterly revenue and profit missed analysts' expectations.
Ahead of the opening bell, Dow Jones industrial average futures fell 59, or 0.6 percent, to 10,268. Standard & Poor's 500 index futures declined 6.20, or 0.6 percent, to 1,088.10, while Nasdaq 100 index futures fell 8.00, or 0.5 percent, to 1,762.25.
The ICE Futures US dollar index, which measures the dollar against other major currencies, rose 0.48 to 75.77.
Homebuilder D.R. Horton Inc. said its fiscal fourth-quarter loss narrowed as it took smaller write downs on its inventory. Even as its losses shrank, revenue fell 42 percent as the housing market remained unsteady.
"Investors seem to need a constant reassurance with where we are in the economic recovery," said Brett D'Arcy, chief investment officer at CBIZ Wealth Management Group in San Diego. "We just haven't gotten it in the past few days."
D'Arcy expects stocks to continue to sell off Friday given the disappointing economic data earlier this week.
Weak housing and mortgage data the past two days has helped bring the market's nearly relentless rise to a halt amid concerns any economic recovery will be slow and bumpy. On Thursday, the Mortgage Bankers Association provided fresh evidence that the housing market is still fragile. The trade group said more than 14 percent of homeowners with a mortgage were behind in their payments or facing foreclosure at the end of September.
Technology shares fell sharply after an analyst downgraded the chip sector. The tech-heavy Nasdaq composite index fell 1.7 percent. The Dow fell 0.9 percent, while the S&P declined 1.3 percent.
As investors have jumped out of stocks in recent days, they have moved money into safe assets like Treasury bonds, pushing their prices higher. The yield on the three-month T-bill, which moves opposite its price, fell to its lowest level since last December as the credit crisis was mushrooming. The yield hit 0.005 percent late Thursday.
The three-month yield moved higher Friday, rising to 0.02 percent.
The yield on the benchmark 10-year Treasury note rose to 3.35 percent from 3.34 percent late Thursday.
Overseas, Japan's Nikkei stock average declined 0.5 percent. Britain's FTSE 100 fell 0.4 percent, Germany's DAX index declined 0.7 percent, and France's CAC-40 dropped 0.8 percent.