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Dow futures drop after 5-day rally on worrisome data from China

Published 03/08/2016, 07:05 AM
Updated 03/08/2016, 07:05 AM
© Reuters.  U.S. futures take a pause after 5-day winning streak on global growth concerns

Investing.com – U.S. futures pointed to a lower open on Tuesday, taking a pause after the a 5-day winning streak and following the global trend downward after worrisome data from China suggested that the world’s second largest economy was still mired in a slowdown.

Specifically, the blue-chip Dow futures lost 90 points, or 0.53%, by 12:02GMT, or 7:02AM ET, the S&P 500 futures fell 12 points, or 0.59%, while the tech-heavy Nasdaq 100 futures shed 32 points, or 0.75%.

Chinese exports plunged 25.4% from a year earlier in February, far worse than forecasts for a decline of 12.5% and the worst monthly performance since May 2009, while imports dropped 13.8%, compared to expectations for a fall of 10.0%.

Oil prices also pulled back from 3-month highs due to the worrying data from the Asian giant, the world’s second-largest oil consumer and while waiting for the publication of the American Petroleum Institute’s weekly crude inventories late in Tuesday’s session.

U.S. crude futures fell 0.34% to $37.77 by 12:04GMT or 7:04AM ET, while Brent oil traded down 0.07% to $40.81.

Among similar global growth worries, the Organization for Economic Cooperation and Development (OECD) said on Tuesday that its January monthly composite leading indicators, which are supposed to capture economic turning points, flagged "signs of easing growth" in the 34 advanced economies belonging to the group.

In a light calendar day stateside, small business optimism unexpectedly declined in February, according to the National Federation of Independent Business (NFIB) survey.

With the pending monetary policy meeting from the Federal Reserve (Fed) scheduled for March 15 and 16, no officials were scheduled to speak on Tuesday as the 7-day blackout period for communications was set in full swing.

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Previously, Federal Reserve governor Lael Brainard did show concern on Monday that inflation expectations may have actually slipped downwards and that she would be wary of approving further rate hikes until there were signs of firming in domestic prices.

However, Fed Vice Chairman Stanley Fischer offered an opposing view as he insisted that “we may well at present be seeing the first stirring of an increase in the inflation rate.”

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