U.S. Stocks Head for Flat Open
Tuesday, September 4th 2007, 7:25 am
By: News On 6
NEW YORK (AP) _ U.S. stocks headed for a flat open Tuesday as investors returning from a long holiday weekend awaited economic data to help determine whether the Federal Reserve will lower interest rates when it meets in two weeks.
After a volatile August, investors will be looking to readings on construction spending, manufacturing and automobile sales to indicate how the economy is holding up and whether a rate cut might be in the offing. Wall Street finished Friday with big gains following comments from Fed Chairman Ben Bernanke that the central bank stood ready to ``act as needed'' to prevent the credit crisis from hurting the national economy.
The Fed meets Sept. 18 and some investors are predicting it will lower its benchmark federal funds rate after more than a year of standing pat on rates. In recent weeks, more difficult access to credit has made it harder for consumers and businesses alike to borrow, stirring concerns that tighter access to money will hurt the economy.
On top of concerns about credit and a lackluster housing market, Wall Street enters what is often one of its most difficult months. As is typical, volume in late August was light with many investors away. Investors returning from vacations often reassess their holdings. The S&P 500 typically loses 0.7 percent in during the month and 0.6 percent in Septembers that precede an election year, according to the Stock Trader's Almanac.
On Tuesday, investors will receive government data on construction spending in July as well as the Institute for Supply Management's measure of U.S. manufacturing. Investors this week will also be awaiting the August employment report for an indication of how consumers are faring.
Dow Jones industrial average futures fell 17, or 0.13 percent, to 13,347. Standard & Poor's 500 index futures fell 3.40, or 0.23 percent, to 1,473.30. Nasdaq 100 index futures slipped 3.75, or 0.19 percent, to 1,991.00.
Bonds rose. The yield on the 10-year Treasury note, which moves inversely to its price, fell to 4.52 percent from 4.53 percent late Friday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 6 cents to $74.10 per barrel in premarket electronic trading on the New York Mercantile Exchange.
In corporate news, Research In Motion Ltd. shares fell in premarket trading after a Bear Stearns & Co. analyst lowered his rating on the maker of the Blackberry device, citing a high stock price.
Stock of Kaydon Corp., a maker of engineered products, is susceptible to an economic slowdown, a Deutsche Bank analyst said. In downgrading the stock, he noted the company's shares have risen nearly 40 percent in the last year.
Overseas, Japan's Nikkei stock average fell 0.63 percent. Britain's FTSE 100 fell 0.15 percent, Germany's DAX index rose 0.07 percent, and France's CAC-40 slipped 0.33 percent.