Dow Futures Fall On Taper Fears, But Time Warner Inc Beats the Street

Stock index futures suggest a lower start for the Dow Jones and S&P 500 this morning, as investors continue to worry that the Fed may scale back its bond-buying programme.

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LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.34% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down 0.32%. The CNN Fear & Greed Index is set to open at 53, or ‘neutral’, after closing at 61, ‘greed’, yesterday.

European markets fell this morning, after the Bank of England’s new governor, Mark Carney, issued the Bank’s first ever forward guidance. In an echo of recent comments from Fed Chairman Bernanke, Carney said that interest rates would not rise until unemployment fell below 7%, unless inflation became too high or there was another threat to financial stability. At 7.00am ET, the FTSE 100 was down 0.77%, the DAX was down 0.40% and the CAC 40 was down 0.10%.

In the US, the only major economic report due today is June’s consumer credit report, but investors may be more concerned about renewed speculation that the Federal Reserve may start tapering its bond purchases as soon as September. The speculation was triggered by yesterday by the Chicago and Atlanta Fed presidents, who both made comments suggesting tapering could start next month. Asian markets closed lower on the ‘taper talk’, with the Nikkei closing down by 4% earlier today.

Earnings season is drawing to a close, but Time Warner (NYSE: TWX.US) may be actively traded today after reporting adjusted earnings per share of $0.83 for the second quarter, beating analysts’ expectations of $0.76 per share. AOL, Duke Energy, Devon Energy and Mondelez International are all also due to report quarterly results before markets open this morning. Tesla Motors reports after the close tonight, and investors will be particularly keen to the electric car firm’s latest figures, given that Tesla’s stock price has risen by 138% over the last quarter.

First Solar fell almost 10% in pre-market trading after the firm released second-quarter results showing that net sales fell to $520m in the second quarter, down by $438m from the second quarter of 2012. The Walt Disney Company fell by 1.9% in pre-market trading after the company said that it faced a $190m loss on its Lone Ranger movie, while real estate marketplace company Zillow was down 8.7% in pre-market trading,after it reported its second-quarter results after the close yesterday.

Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.

If you, like Buffett, are convinced about the long-term power of the Dow, you should read “5 Stocks To Retire On“. Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

> Roland does not own shares in any of the companies mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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