U.S. stocks appeared headed for a sharply lower opening Thursday as skittish investors awaited a key economic reading on manufacturing and still looked to find their footing following Tuesday's selloff.
The Institute for Supply Management's index of manufacturing activity for February, which is due after the market opens, is an important measure of a part of the economy that has given investors headaches in recent months. Manufacturing has struggled and at times given off signals that a recession might be in the offing. The market predicts the ISM number will come in at 50.0, up from 49.3 last month. The figure is important as 50 and above indicates expansion, while anything below 50 signals contraction.
Some of the concern that led to Tuesday's 416-point drop in the Dow Jones industrials stemmed from unease over the U.S. and foreign economies. Fresh economic findings therefore have the potential to allay or enflame investors' concerns as they look to regain some of the swagger that was so abruptly dispatched on Tuesday. The major indexes managed gains Wednesday though they still remained well below their levels before Tuesday's fall.
Futures grew weaker Thursday ahead of release of the economic data. Dow Jones industrials futures were down 89 at 12,185.00; Nasdaq 100 futures fell 21.0 to 1,744.50 and Standard & Poor's 500 futures were down 13.30 at 1,395.60.
Stocks in Asia and Europe lost ground. A 2.9 percent drop in the Shanghai Composite Index weighed on sentiment. It was the index's nearly 9 percent drop Tuesday that set off a worldwide selling spree.
A warning of a possible U.S. recession from former Federal Reserve Chairman Alan Greenspan also contributed to the heavy selling Tuesday. On Thursday, speaking in Tokyo, Greenspan amended his remarks to say he does not see a U.S. economic slowdown as "probable."
Before the opening bell, investors will get a look at Commerce Department data on personal income for January. A confident consumer willing to spend is integral to ushering the economy to the gradual slowdown Wall Street has been hoping for.
Weekly data on jobless claims, which are prone to fluctuations, might nonetheless offer further insight into the health of the consumer when they are released before the market open.
After the start of trading, the Commerce Department plans to release data on January on construction spending. Also, automakers are expected to report monthly sales results Thursday.
Among corporate news, database and software maker Oracle Corp. agreed to acquire Hyperion Solutions Corp. for $52 per share in cash, or $3.3 billion (EUR2.5 billion). The price tag carries a 21 percent premium to Hyperion's Wednesday close of $42.84. The stock has traded from $26.65 to $45.18 in the past 52 weeks.
Media conglomerate Viacom Inc. on Thursday reported its fourth-quarter profit more than tripled as revenue jumped 32 percent. Results were stronger than expected as revenue from its film division doubled with the acquisition of the DreamWorks studio.
Sears Holding Corp., which controls Sears department stores and Kmart discount stores, reported a better-than-expected increase in its fiscal fourth-quarter profit as margins improved despite weaker sales at established stores, reports AP.
Motorola Inc. drew investor attention after the company said billionaire financier Carl Icahn and related entities hoped to acquire more than $1 billion (EUR760 million) of the company's stock. Icahn was already one of the company's largest shareholders.
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