Stock index futures pointed to a flat to lower open on Tuesday after a long weekend as tensions surrounding North Korea unsettled investors and hopes for a quick economic recovery in the near-term ebbed.
North Korea, despite international condemnation of its latest nuclear test, fired two more short-range missiles off its east coast on Tuesday and accused the U.S. of plotting against its government.
There's not much more the U.S. can do without China taking za proactive role. That's always been the case with North Korea, it continues to be the case, nothing has changed, said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco.
We should expect to see further consolidation through the month of June simply because the market has run so far and the market is looking to consolidate these gains over time, Pado said.
S&P 500 futures fell 5.30 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones Industrial Average futures shed 42 points, while Nasdaq 100 futures were off 8.25 points.
U.S. oil prices for July delivery fell $2 to $59.67 a barrel, pressured by a firmer U.S. dollar and expectations that an OPEC meeting later this week could keep the producer group's output unchanged. Chevron Corp
General Electric Co
On the economic front, prices of single-family homes in March fell 18.7 percent from a year earlier, while prices in the first quarter dropped at a record pace, according to the Standard & Poor's/Case-Shiller Home Price Indicies released on Tuesday.
Another key piece of data due at 10 a.m. is U.S. consumer confidence.
Investors will also keep a close eye on the fixed income front. The benchmark U.S. Treasury debt price rose in Asian trade on Tuesday, with the yield edging away from last week's six-month peak, while the market braced for $101 billion worth of government debt sales this week.
The U.S. Treasury sells $40 billion of two-year notes on Tuesday, $35 billion of five-year debt on Wednesday and $26 billion of seven-year paper on Thursday, matching a record for weekly bond sales set in April.
U.S. stocks retreated for a fourth session on Friday on persistent concerns over the U.S. budget deficit, with U.S. Treasuries and the dollar losing ground.
Despite the declines for the broad S&P 500, U.S. stocks finished moderately higher for the week with the blue-chip Dow average up 0.1 percent, the S&P 500 up 0.5 percent and the Nasdaq up 0.7 percent.
Since reaching a low in early March, the Dow has gained 28 percent and the S&P 500 has risen 33 percent.
(Reporting by Chuck Mikolajczak; Editing by Padraic Cassidy)