U.S. Stock Futures Defensive Before FOMC Minutes; Markets Spooked By Bank of England Dissenters

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U.S. stock futures turned moderately lower heading into Wednesday's release of Federal Open Market Committee meeting minutes, with disappointing financial guidance from Lowe's ( LOW ) and Target ( TGT ) , a selloff in U.K. equities and two days of impressive gains combined to give the market a much more cautious tone.

Although the FOMC is unlikely to have changed its policy stance dramatically, Wall Street is positioning for more hawkish language regarding the landscape for higher U.S. rates including an improvement in the housing market, less job market slack, and consistent strength in production. The FOMC minutes will be released at 2 p.m. ET.

European markets were defensive as well after the Bank of England released the minutes from its Aug. 7 policy meeting showing two members of the central bank voted to boost U.K. rates. Overseas traders had been comfortable with the belief that recent inflation data and geopolitical events had shelved a rate increase until at least 2015, but after the two dissenting votes were revealed, U.K. equities tumbled, taking European equities lower in sympathy.

In corporate news, Target reported in-line adjusted Q2 earnings, but its Q3 guidance missed Street expectations and the retailer lowered its FY2014 outlook. Lowe's, meanwhile, reported better-than-expected earnings for the latest quarter, but lowered its sales forecasts for FY2014. On the plus side, American Eagle ( AEO ) posted Q2 results above expectations while Staples ( SPLS ) also beat earnings expectations. PetSmart ( PETM ) shares also rose on higher-than-expected Q2 earnings as well as plans to put itself up for sale.

-Dow Jones Industrial down 0.07%

-S&P 500 futures down 0.11%

-Nasdaq 100 futures down 0.02%

SENTIMENT

Nikkei up 0.03%

Hang Seng up 0.15%

Shanghai Composite down 0.23%

FTSE-100 down 0.49%

DAX-30 down 0.84%

PRE-MARKET SECTOR WATCH

(+/-) Large cap tech: Mixed

(-) Chip stocks: Lower

(-) Software stocks: Lower

(+/-) Hardware stocks: Mixed

(-) Internet stocks: Lower

(+/-) Drug stocks: Flat

(-) Financial stocks: Lower

(+/-) Retail stocks: Mixed

(-) Industrial stocks: Lower

(+) Airlines: Higher

(-) Autos: Lower

UPSIDE MOVERS:

(+) FOLD (+17.72%) Reports positive data in Fabry Disease treatment study

(+) AEO (+9.92%) Beats street on EPS and revenues despite year-over-year decline

(+) ZPIN (+10.24%) Reported upbeat Q4 earnings, Q1 outlook

DOWNSIDE MOVERS:

(-) HTZ (-12.74%) Expects 2014 results well below low end of guidance

(-) YOKU (-7.30%) Misses Q2 estimates, Q3 sales outlook below street

(-) JASO (-4.40%) Reported lower-than-expected Q2 EPS and revenue

(-) NBY (-35.20%) Fails to meet endpoints in conjunctivitis study, no plans to further study of NVC-422



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities

Referenced Stocks: LOW , TGT , AEO , SPLS , PETM

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