RTTNews - The major European markets are poised to open weaker on Wednesday, taking cues from the weak performance on Wall Street. Concerns about the pace and magnitude of the global economic recovery looms large after U.S. President Obama predicted that the unemployment rate in the world's largest economy might reach or surpass 10%. Disappointing quarterly sales reported by Best Buy also impacted sentiment, dragging the indices firmly into negative territory.

In the U.S., stocks finished Tuesday's session firmly in the negative despite positive housing starts data. Weaker-than-expected producer price index and industrial production numbers, however, dampened the early euphoria and disappointing sales numbers from Best Buy and comments from President Barak Obama impacted the sentiment amid fresh concerns about global recovery.

A report released by the Commerce Department revealed that housing starts rose sharply by 17.2% during May to an annual rate of 532,000 units from the revised estimate of 454,000 units in April. Economists had expected starts to rise to 485,000 from the 458,000 originally reported for the previous month. While single-family starts showed a notable 7.5% rise in May, the jump in housing starts was due in large part to a 77.1% surge in buildings with five units or more.

In a separate report, the Labor Department revealed that producer prices rose 0.2% in May, following a 0.3% percent increase for April. Economists expected the prices to rise 0.6% during the month. Core producer prices, which leave out the impact of volatile food and energy prices, edged down by 0.1% for May. In April, the figure was up by 0.1 percent.

The Federal Reserve, in a separate report, revealed that industrial production fell by 1.1% in May following a revised 0.7% decrease in April. Economists had been expecting production to fall 1.0%. The report also showed that capacity utilization fell to 68.3% in May from a revised 69.0% in the previous month. The capacity utilization rate had been expected to slip to 68.4% from the 69.1% originally reported for April.

The Dow closed down by 107.46 points or 1.3% at 8,505, the Nasdaq closed down by 20.20 points or 1.1% at 1,796 and the S&P 500 closed down by 11.75 points or 1.3% at 912.

Meanwhile, the European markets ended in negative territory for the third day on Tuesday, on concerns about the global economic recovery. Banking stocks led the declines amid mixed economic data both domestically and across the pond.

The FTSEurofirst 300 index of pan-European blue chips closed 0.01% lower at 863, while the narrower DJ Stoxx 50 index fell 0.17% to 2,133. France's CAC 40 index fell 0.17% to 3,214, while the U.K.'s FTSE 100 index rose 0.06% to 4,329 and Germany's DAX index advanced 0.02% to 4,891.

On the economic front, the minutes of the Monetary Policy Committee meeting of the Bank of England and the British labor market statistics are on tap. At 4.30am ET, the minutes of the Bank of England's MPC meeting is due. In its two day meeting held on June 3 and 4, policymakers retained the interest rate at a historic low of 0.5% and decided to continue with its bond purchases program totaling GBP 125 billion using central bank reserves.

The Office for National Statistics is slated to issue the U.K labor market statistics for May. The claimant count is forecast to rise to 4.9% in May from 4.7% in April. Meanwhile, the increase in jobless claims is seen at 60,000 compared to 57,100 last month. At 5.00 am ET, the Eurozone trade balance is due to be released. The trade deficit is seen at EUR 1.5 billion in April versus EUR 0.4 billion surplus logged in March.

Crude oil is inching towards the $71 a barrel mark after a volatile session Tuesday. The US greenback is trading weaker against its European counterparts while it is attempting to recover from its 13-day low against the Japanese yen.

Yogurt maker Danone SA may react to press reports that it might buy Le Serenisima, the biggest milk producer in Argentina.

British American Tobacco could be in focus after revealing plans to acquire a 85% stake in Indonesia's PT Bentoel Internasional Investama as part of its expansion plans to new markets.

Wynnstay Group PLC (WYN.L) could react to news that profit for the first half of the fiscal year increased marginally on higher revenues.

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