Dow Futures Fall Ahead Of FOMC Minutes

Stock index futures suggest the Dow Jones may fall ahead of the publication of the latest FOMC minutes, which may provide further information about the Fed’s plan to taper QE.

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LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.28% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down by 0.33%. CNN’s Fear & Greed Index remains in the fear zone, and is set to open at 30 today, after closing at 28 yesterday.

European stock markets drifted lower this morning, ahead of this afternoon’s publication of the latest FOMC minutes, which will be published after European markets close. Several big UK stocks, including HSBC Holdings and British American Tobacco, went ex-dividend this morning, placing further pressure on the index. In Amsterdam, Heineken, the world’s third-largest brewer, dropped 2.5% after reporting a fall in profits. At 7am ET, the FTSE 100 was down 0.7%, the DAX was down 0.3% and the CAC 40 was down 0.1%.

US investors will be resolutely focused on the minutes from the 30-31 July meeting of the Federal Open Market Committee (FOMC). The minutes are due to be published at 2pm ET, and investors expect that they may provide some clues as to whether the Fed is likely to start tapering bond purchases in September, and perhaps as to how fast this process is likely to be. Today also sees the publication of July’s existing home sales report, which is due at 10am and is expected to show that sales of existing homes rose to 5.21m in July, up from 5.08m in June.

On the corporate front, several big names will report earnings before the open this morning. Home-improvement retailer Lowe’s Co reported second-quarter earnings of $0.88 per share earlier this morning, which beat analysts’ estimates of $0.79, and were 38% higher than for the same period last year. Office supply retailer Staples also reported early this morning, missing forecasts with second-quarter earnings of $0.16 per share, down from $0.18 for the same period last year, while home-builder Toll Brothers reported a 24% drop in fiscal third-quarter profits due to a tax expense. Other companies due to report before the open include American Eagle Outfitters, J.M. Smucker, PetSmart and Target.

Other stocks that may be actively traded today include La-Z Boy Incorporated, which beat expectations in an after-hours earnings report last night, and Hewlett Packard, which is expected to report a steep decline in profits after markets close today.

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 owns shares in HSBC Holdings but does not own shares in any of the other 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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