RTTNews - After a lackluster performance in the previous session, stocks are poised to open on the downside Wednesday, as traders are digesting a bigger than expected drop in durable goods orders and a mixed batch of earnings. The major index futures are all in the red, with the Dow futures down by 48 points.
With orders for transportation equipment showing a substantial decline, the Commerce Department released a report showing that orders for manufactured durable goods fell by much more than expected in the month of June.
The report showed that durable goods orders fell 2.5 percent in June following a downwardly revised 1.3 percent increase in May. Economists had expected orders to fall 0.6 percent compared to the 1.8 percent increase originally reported for the previous month.
Excluding a 12.8 percent decrease in orders for transportation equipment, orders for durable goods actually rose 1.1 percent in June compared to a 0.8 percent increase in May. The increase surprised economists, who had expected ex-transportation orders to come in unchanged.
Later today, the Federal Reserve is due to release its Beige Book, which is a compilation of anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts. The report is due to be released at 2 p.m. ET.
In earnings news, Time Warner (TWX) reported adjusted second quarter net income of $0.45 per share, compared to $0.47 per share in last year's second quarter. While the earnings beat analyst estimates of $0.37 per share, revenues of $6.81 billion fell short of the expected $6.97 billion.
Sprint Nextel (S) reported a second-quarter net loss of $0.13 per share compared to a loss of $0.12 per share in the same quarter last year. The telecom company also said its revenue fell 10 percent to $8.14 billion amid a decrease in subscribers.
Meanwhile, Qwest Communications' (Q) second-quarter net income rose to $0.12 per share from $0.10 per share in the same period a year earlier. The firm exceeded analyst estimates, which called for a profit of $0.10 per share, although revenues failed to meet expectations.
Energy firm ConocoPhillips (COP) reported second-quarter earnings of $0.87 per share, compared with net income of $3.50 per share in the same quarter last year. While the results bested analyst estimates of $0.85 per share, revenues fell well short.
In other news, Yahoo! (YHOO) and Microsoft (MSFT) have signed an agreement whereby Microsoft would now power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies' premium search advertisers. The deal is expected to close sometime in 2010 and has a lifespan of 10 years.
Following a choppy trading session, stocks closed Tuesday's session on a mixed note in reaction to the day's varied earnings and economic reports. While the Nasdaq closed up by 8 points at 1,976, the Dow fell by 12 points to 9,097 and the S&P 500 slipped by 3 points to 980.
Crude oil futures are falling in early commodities trading, sliding by $1.14 to $66.09 a barrel after declining by a notable margin in the previous session. The price of gold is also retreating, dipping by $3.40 to $935.70 an ounce.
On the currency front, the U.S. dollar is gaining against the major European currencies, rising to $1.4119 against the euro and advancing to $1.6406 versus the pound. Against the yen, the buck is also on the rise and is now valued at 94.89 yen.
In overseas trading, stock markets across the Asia-Pacific region finished largely on the downside on Wednesday. Hong Kong's Hang Seng Index slid by 2.4 percent, although Japan's benchmark Nikkei 225 Index bucked the day's downtrend and closed up by 0.3 percent.
Meanwhile, the major European markets are all moving higher, with the German DAX Index and the French CAC 40 Index rising by 2 percent and 1.9 percent, respectively, while the U.K.'s FTSE 100 Index is up by 0.9 percent.
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