Stock index futures dipped on Thursday, adding to weakness from the previous session, after the Federal Reserve gave a more pessimistic outlook on the U.S. economy and offered no hints about further monetary support.
Investors hoping for positive comments from Fed Chairman Ben Bernanke were disappointed, giving them a reason to sell after a four-day rally that lifted stocks from three-month lows.
Economic data from the labor and housing sector will provide fresh clues about the pace of economic growth. Weekly initial jobless claims due at 8:30 a.m. EDT was being closely watched, with claims seen holding steady at 415,000 after a drop last week offered hope the soft patch in the economy could be easing.
New home sales for May, due at 10 a.m. EDT, was expected to show a dip to 310,000 from 323,300 recorded in April.
If we get good numbers, the market will recover some losses. The general view is that we are in a slower economy, confirmed by the Fed yesterday, said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
But if investors see that we are at least on a recovery pattern, then that will give them confidence, especially as we enter anther season of good earnings.
S&P 500 futures fell 10 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 73 points, and Nasdaq 100 futures shed 15 points.
Following the bleak outlook from Bernanke, European Central Bank President Jean-Claude Trichet said the warning lights are flashing red on the euro zone's debt crisis.
European leaders are meeting and will try to convince financial markets they have a workable plan to help highly indebted Greece avoid a debt default.
Further souring the mood from Europe, data from Germany showed the services industry accelerated in June but overall growth in the private sector was flat as manufacturing growth eased.
China's factory sector barely expanded in June even as price pressures eased, reflecting the impact of monetary policy tightening and sluggish global demand.
Bristol-Myers Squibb Co
U.S. stocks dropped Wednesday, halting four days of gains, after the Fed cut its forecasts for U.S. economic growth this year and next.
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(Reporting by Angela Moon; editing by Jeffrey Benkoe)