Stock Futures Slump on U.S. Budget Worries; China Stocks Dive
NEW YORK ( TheStreet) -- Stock futures were pointing to a lower open on Wall Street Monday over concerns about U.S. budget negotiations and after Chinese stocks dived.
Investors this week are awaiting a round of central bank meetings and a key read on the U.S. labor market.
Futures for the Dow Jones Industrial Average were falling 24 points, or 22.66 points below fair value, at 14,050. Futures for the S&P 500 were down 2 points, or 2.3 points below fair value, at 1514. Futures for the Nasdaq were down 6.75 points, or 5.40 points below fair value, at 2742.
President Barack Obama signed an order for $85 billion in automatic government spending cuts after Congress and the White House failed to find a compromise on alternative ways to reduce the budget deficit. The sequester cuts are expected to stay effective for several weeks at least while legislators try to hammer out a budget deal.
No major U.S. economic data were on the docket Monday.
The markets were awaiting a raft of rate decisions from central banks across the globe, watching for more statements on monetary easing or continued support for more accommodative monetary policy as global economic growth worries persist. Investors will keep a close eye on meetings in Japan on Thursday, Australia on Tuesday and Canada on Wednesday. The Bank of England and European Central Bank announcements are expected on Thursday.
A number of U.S. jobs reports will be out as well this week, and investors will be watching the economic indicators for clues on how much longer the Federal Reserve plans to continue with its asset-purchase program. The widely watched U.S. nonfarm payrolls report is scheduled for Friday, preceded by the ADP employment report on Wednesday and weekly jobless claims and Challenger job-cut reports on Thursday.
Other areas of focus this week include any progress Italy might be making in forming a new government, eurozone gross domestic product numbers on Wednesday, and Germany and Spain's industrial output data on Friday.
On Monday and Tuesday, eurozone finance ministers were meeting in Brussels to talk about plans to bail out Cyprus and discuss Italy's political situation.
Hong Kong's Hang Seng index settled down by 1.5% amid worries about the implications of the U.S. budget impasse and as property stocks slumped after China's cabinet announced policies to cool property prices. Also, Chinese services data came in soft.
The Shanghai Composite Index declined 3.7% on Monday.
In Japan, the Nikkei Average in Japan finished up 0.4% as Haruhiko Kuroda, Bank of Japan governor-nominee, advocated aggressive measures to overcome deflation.
The FTSE 100 in London was falling 0.49% and the DAX in Germany was off 0.57%.
Gold for April delivery was rising $3.90 to $1,576.20 an ounce at the Comex division of the New York Mercantile Exchange, while April crude oil futures were off 14 cents to $90.54 a barrel.