Before the bell 2-27-07: Futures fall after attack in Afghanistan and China markets slump

Stock futures are lower in early morning indicating to a sharply lower start for stock on the heal of a few developments, including further tension with Iran and an attack in Afghanistan.

According to reports, a suicide bomber on foot attacked a U.S. airbase in Afghanistan during a visit by Vice President Dick Cheney. The attack, which the Taliban claimed responsibility for acknowledging Cheney was the target, left at least two dozen dead and injured. Cheney was unhurt. Futures fell following the attack.

Other issues affecting the market this morning are expected economic reports today and a sell-off in China as the Shanghai Composite index declined 8.8%. Stocks in China plunged on concern that a government crackdown on investments will end the recent record reaching rally.

At 8:30 AM, January durable goods orders is due with economists expecting a 3% drop compared to a 2.9% increase in December.
At 10:00 AM, January existing home sales and February consumer confidence will be reported. Economists forecast 6.24 million homes compared to 6.22 million the month before. Consumer confidence is predicted to inch down to 109.0 compared to January's 110.3.

Markets in Asia and Europe were also affected by the plunge in China, with many indices down around 1.5%.
In Europe, retail sales dropped for a second month in February after a tax increase discouraged German shoppers. The European fast pace economic growth is predicted to slow in the EU.

Oil continued its climb today as prices rose to over $61.56 a barrel helped by forecasts that U.S. inventory data due this week will show a decline in gasoline and distillate stockpiles and further tensions with Iran, as well as a snowy weather in the Northeast U.S.

In corporate news:

Wal-Mart Stores Inc. (NYSE:WMT) has further expanded in China and bought a 35% stake in a Taiwan-owned company that operates Trust-Mart discount markets, one of the country's biggest retail chains. Financial details of the deal were not disclosed.

Xerox Corp. (NYSE:XRX) yesterday cut its first-quarter profit forecast to reflect. The reason is related to a restructuring charge at Fuji. Xerox now expects to earn between 18 cents and 20 cents a share compared to an average estimate of 23 cents a share. XRX shares were down over 1% in after-hours trading.

Lehman Brothers cut Dow Chemical Co. (NYSE:DOW) to underweight from equal weight due to valuation following the recent reaction to a possible takeover of the company.