By Dow Jones Business News, October 31, 2013, 07:17:00 AM EDT
By Sara Sjolin
U.S. stock futures pointed to a lower open on Wall Street on Thursday, set to extend losses sparked by a less-dovish-
than-expected statement from the Federal Reserve a day earlier.
Investors also will eye earnings from Exxon Mobil Corp. (XOM) and American International Group Inc. ( AIG ) as well as
latest report on jobless claims and Chicago PMI.
Futures for the Dow Jones Industrial Average dropped 28 points, or 0.2%, to 15525, while those for the S&P 500 index
fell 4.90 points, or 0.3%, to 1755.70. Futures for the Nasdaq 100 index gave up 15.25 points, 0.5%, to 3377.00.
The losses built on weakness seen on Wednesday, when U.S. stocks retreated from record levels as investors assessed
the Fed's statement after its two-day policy meeting. As expected, the central bank made no changes to interest rates or
asset-purchases program, but the accompanying statement left some Fed observers worried the tapering process could come
sooner than expected. The bank was not as uncertain on the economy--thus more dovish on monetary policy--as some had
expected, given the recent string of weak data and the government shutdown earlier in the month.
The Wall Street Journal's Jon Hilsenrath, an influential Fed watcher, suggested that the Fed "isn't taking a December
adjustment to the bond-buying program off the table." Ahead of the meeting this week, several analysts saw March
tapering as more likely.
Analysts at Deutsche Bank said in a note on Thursday that "the market had perhaps hit a near-term complacency peak on
the timing of the taper and maybe yesterday's statement should be a reminder that the Fed probably does want to taper
soon even if it might actually struggle to do so in reality. Sounds like a recipe for a bit of volatility in a generally
Data out on Thursday will give further hints to the health of the economy. At 8:30 a.m. EDT, data are expected to show
that jobless claims fell to 335,000 in the week ended Oct. 26 from 350,000 in the prior week, according to economists
polled by MarketWatch.
But lately the report has not been very reliable as an indicator of labor-market trends, partly due to processing
delays in California and private-sector layoffs related to the government shutdown.
There also is Chicago PMI data for October out at 9:45 a.m., expected to show a drop to 54.5 from 55.7 in September.
On the earnings calendar, Exxon Mobil and American International Group were among the highlights.
For Exxon, analysts polled by FactSet expect third-quarter earnings of $1.77 a share. The company's board on Wednesday
declared a fourth-quarter dividend of 63 cents a share, unchanged from the third quarter.
After the closing bell, AIG is projected to report third-quarter earnings of 96 cents a share. Analysts at Keefe,
Bruyette & Woods recently said insurers like AIG are likely to post strong underwriting results in the third quarter due
to mostly favorable global weather.
Among notable movers ahead of the open, shares of Facebook Inc. (FB) climbed 3.5% after the social-media firm late
Wednesday said it earned 25 cents a share on an adjusted basis in the third quarter, beating the average consensus of 19
cents a share.
Expedia Inc. (EXPE) soared 19% premarket after late Wednesday reporting an 8% rise in adjusted earnings per share to $
1.43, above Wall Street's forecast of $1.36 share.
Starbucks Corp. (SBUX) slipped 1.7% in premarket trade, even as the company on Wednesday said its fourth-quarter
profit came in at 63 cents a share, beating the consensus estimate of 60 cents a share.
In other financial markets, both Asian and European markets were mostly higher, while the dollar rose. Metals dropped
across the board, while oil prices inched higher.
Write to Sara Sjolin at firstname.lastname@example.org
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