Filed under: Before the bell, International markets, Earnings reports, Hewlett-Packard (HPQ), Market matters, Economic data, KKR Financial (KFN), Housing, Federal Reserve
U.S. stock futures were significantly lower this morning, indicating U.S. stocks could have a rough start as investors await data on inflation and housing. Despite solid results from Hewlett-Packard after the closing bell Tuesday, renewed concerns about the credit market, oil climbing above $100 a barrel and the uncertainty about the upcoming data pulled futures lower.
Like seemed what was going to be a healthy gains day Tuesday, ended on a down note after oil futures reached the $100 a barrel. The Dow industrials fell almost 11 points, or 0.09%, the S&P 500 lost over 1 point, or 0.09%, and the Nasdaq Composite dropped 15 points, or 0.67%.
- At 8:30 a.m., consumer price index for January will be reported. Economists predict inflation might have grown 0.3% during January, or 0.2% excluding fuel and energy prices.
- At the same time, January housing starts and building permits also will be released. Economists expect the data to remain near the lowest level since 1991 in January, as the deepest real-estate recession in a quarter-century will weigh on the economy for a third year.
- At 2 p.m., the Fed will release minutes from the last interest-rate policy committee in which it slashed rates by a half-point.
Meanwhile, around 10:30 a.m., weekly crude inventories will be reported. Oil shut for the first time above $100 a barrel Tuesday, but prices retreated somewhat Wednesday to around $99 a barrel. Concerns over a refinery explosion and the possibility that OPEC might cut its output caused oil prices to spike with several other factors remaining in the background.
Overseas, stocks fell in Europe and Asia following oil’s price spike. Stocks in Asia fell sharply with Japan’s Nikkei 225 Stock Average sinking 3.3%, and Hong Kong’s Hang Seng Index slipping 2.2%.
In Europe, Germany’s DAX declined 1.9%, France’s CAC 40 lost 1.8% and the U.K.’s FTSE 100 also slid 1.8%.
Fresh credit fears were brought forth when KKR Financial Holdings (NYSE: KFN) has postponed repayment of billions of commercial paper and is restructuring talks with creditors. KKR Holdings is the listed affiliate of private-equity firm Kohlberg Kravis Roberts & Co.
On a good note, though, Hewlett-Packard (NYSE: HPQ) stated it earned $2.13 billion, or 80 cents per share, for the three months ended in January. That compared with net income of $1.55 billion, or 55 cents per share, in the same period a year earlier. Excluding one-time items, HP said it would have earned 86 cents per share, exceeding the 81 cents analysts have been expecting. Revenue for the period increased 13% to $28.5 billion. H-P shares are up over 4.2% in premarket trading and the good news will likely help boost the tech sector.
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