Dow Expected To Open Lower Ahead On Taper Uncertainty

Stock index futures indicate that the Dow Jones and S&P 500 may open lower today, as investors hesitate ahead of this week’s deluge of economic data.

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LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.40% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down 0.50%. The CNN Fear & Greed Index is set to fall back to 44, or ‘fear’, on opening, after closing at 46 on Friday.

European markets surged briefly higher this morning, before settling retreating to settle lower by midway through the day’s trading session. Losses were modest and broad-based, with no major economic news due in the UK or the eurozone today, except for the latest GDP figures from Greece. These showed that the country’s economy shrank by 4.6% in the second-quarter, compared to the same quarter last year — a slightly better result than the 5% contraction forecast by analysts. At 7am ET, the FTSE 100 was down 0.31%, the DAX was down 0.75% and the CAC 40 was down 0.39%.

This week sees a raft of US economic reports that may help investors assess how strong the US recovery is — and how likely it is that the Federal Reserve will begin to taper its bond purchasing program from September. However, today’s economic calendar is limited to the July Federal budget, which is due at 2pm ET and is expected to show a deficit of $96bn, compared to $69.6bn in July 2012.

Today’s earnings calendar is also relatively quiet, but amongst the companies due to report before markets open is Sysco Corp, which is expected to report earnings of $0.55 per share on revenue of $11.6bn, according to analysts’ consensus estimates. Companies scheduled to report later in the day or after the close include Dick’s Sporting Goods, American Apparel, Dillard’s and Chinese internet company Sina Corp, which is expected to report earnings of $0.12 per share on revenue of $147m.

Apple (NASDAQ: AAPL.US) stock may also be in demand when markets open today. The company’s stock was up slightly in pre-market trading this morning, following an International Trade Commission (ITC) ruling on Friday that prevents Samsung from selling certain devices that the ITC says infringe on Apple patents. Bank of America and Citigroup were also more than 1% lower in pre-market trading, and J.C. Penney stock may continue to attract speculation as the company’s boardroom feud escalates.

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. The Motley Fool owns shares in Apple.

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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