U.S. stock-index futures fell on concerns that a potential increase in interest rates may come earlier than anticipated after the
Federal Reserve said it will end its bond-buying program.
Standard & Poor's 500 Inex (SPX) futures expiring in December fell 0.6% to 1,961.1 at 7:37 a.m. in New York as investors await data that may show economic growth expanded at a slower rate in the third quarter. Futures on the Dow Jones Industrial Average slipped 78 points, or 0.5%, to 16,846.
“The Fed is affecting the mood,” said Patrick Spencer, head of U.S. equity sales at Robert W.
Baird & Co. in London. “They're basically saying everything is on track for the best case in the economy, but maybe the first interest-rate hike will get closer, and that might worry people.”
The equity benchmark erased a gain of as much as 0.4%, heading lower with European stocks, after the head of the region's banking authority said the recent stress tests on lenders weren't foolproof. The results of the European Banking Authority's health check among lenders show that banks still have work to do to ensure capital adequacy, EBA Chairman Andrea Enria said at event in Berlin.
“We obviously have to be more aggressive in terms of structural reforms in Europe,” Mr. Spencer said. “I suspect some of these banks were given a free pass.”
The S&P 500 erased its gains yesterday and closed 0.1% lower after the Fed confirmed it will end its asset-purchase program, indicating the U.S. economy is on a stable growth path. The central bank reiterated its commitment to keep interest rates low for a considerable time until inflation increases toward its goal.
SLOWER GROWTH
Economists surveyed by Bloomberg News project that Thursday's reports will show the world's largest economy expanded 3% in the third quarter, compared with 4.6% growth in the previous three months, and that claims for unemployment benefits increased last week. Data will also show that personal consumption advanced slower in the last quarter, they forecast.
Parexel International Corp. declined 14% to $54.74 in early New York trading. The contract-research company lowered its sales forecast for the full year, saying it expects revenue of not more than $2.11 billion, compared with its August prediction for at least $2.13 billion.
Altria Group Inc. may be active. The largest seller of tobacco in the U.S. reported third-quarter revenue and profit that beat estimates. Altria also reaffirmed its full-year earnings forecast.
Visa Inc. (V) advanced 3.5% to $222.21. The world's largest payments-service provider said adjusted profit was $2.18 a share in the fiscal fourth quarter, beating analysts' projection for a profit of $2.10.
MasterCard Inc. rose 2.5% to $77.90 before reporting results.
Lakeland Industries Inc. jumped 33% to $15.43 after seeing “significant interest globally” for protective suits in anticipation of a worsening Ebola outbreak.
