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Monday 31 October 2011

U.S. Stock Futures Retract from Last Week’s Gains

Weighed down by weakness in overseas markets and apprehensions of investors regarding the key readings on the U.S. economy this week, U.S. stock futures pulled back from the sharp gains observed at the end of last week. Dow Jones Industrial Average plunged 89 points to 12,079. The Dow rose 524 points over the last three sessions to extend its month-to-date gains to 1,318 points. As such, the Dow is on track if it does not slip more than 315 points on Monday. If so, it will create the biggest monthly gain in its 115-year history.

Futures on Standard & Poor’s 500-stock index fell 12 points to 1,269 and Nasdaq 100 futures slumped 19 points to 2,378. It is worth noting that changes in stock futures don’t always accurately predict stock moves after the opening bell.

Europe was broadly lower in overseas markets with the Stoxx Europe 600 down 1.3%, as some investors were skeptical about the effectiveness of last week’s plan to resolve the euro-zone’s debt crisis. Doubts regarding the strength of the economy also lowered investors’ sentiments.

The Organization of Economic Development and Cooperation said Monday that some advanced economies could have persistent runs of weak growth and high employment and that the GDP of the euro zone was expected to rise only 0.3% next year instead of the previous forecast of 2%.

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