Strong dollar weighs on futures ahead of data

 @ibtimes
on December 17 2009 8:24 AM

U.S. stock index futures fell on Thursday, a day after the Federal Reserve voiced growing optimism about the economy, boosting the U.S. dollar even as interest rates stayed at historic lows.

FedEx Corp shares fell 3.3 percent to $86.98 in premarket trading after the package delivery group, an economy bellwether, posted quarterly results.

Citigroup Inc shares slid 7.8 percent to $3.18 premarket after the bank's stock offering attracted weak demand and priced much lower than expected, prompting the U.S. Treasury to delay a plan to sell $5 billion of its stock in the bank.

The Fed voted to keep interest rates at historic lows on Wednesday, but the U.S. dollar strengthened as the Fed said economic activity has continued to pick up.

Growing concerns about Greece's fiscal health weighed on the euro and further lifted the greenback. The dollar index <.DXY> jumped nearly 1 percent.

We're looking at a weaker open, and it is due to a stronger dollar causing a waning risk factor and weighing on the market, said Peter Cardillo, chief market economist at Avalon Partners in New York.

S&P 500 futures fell 8.3 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 lost 60 points, and Nasdaq 100 futures shed 13.5 points.

Weekly initial jobless claims, leading indicators for November and the Philadelphia Fed's business index are among the economic indicators due on Thursday.

Any larger surprises (in the data) would help, but the market is beginning to convince itself the jobs market is on the mend, Cardillo said. Leading indicators could certainly be the market mover.

Bank of America Corp tapped insider Brian Moynihan as its new chief executive on Wednesday, ending months of speculation about who would succeed Kenneth Lewis. Bank of America shares rose 0.6 percent to $15.37.

Bailed-out insurer American International Group Inc plans to file a prospectus for a multibillion-dollar IPO of its Asian life insurance unit before Christmas, the Financial Times reported on Thursday. AIG shares fell 2.2 percent to $28.30 premarket.

(Editing by Jeffrey Benkoe)

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