Stock futures were positive earlier, trying to recover from yesterday's sell-off, but have reversed direction and are now indicating a lower open once again for this morning. The selloff was caused primarily by the housing market, credit concerns and oil. I still believe we'll see volatility until the market opens and sellers and buyers meet to see demands. The upcoming GDP number will affect the market considerably too.Yesterday, the Dow Jones Industrial average sank 311 point (recovering from a 450 point drop), its second worst point loss day of the year, shedding 2.3%. The S&P 500 was also down 2.3%, but the tech laden Nasdaq 1.8%. At BloggingStocks some bloggers have been pounding the table on the risks of tight credit and its affect on private equity buyouts. A credit crunch may very well put an end to this boom that has helped carry stocks higher.
Today, nothing much have changed. Fundamentals are the same and the same scares that cause investors to pummel stocks yesterday still exist. However, some may view a day after a combined 700 point loss (or thereabouts) in the Dow a buying opportunity, which help give stocks a push.
Economic data today will include advanced second-quarter GDP due out at 8:30 a.m. EDT. According to Briefing.com, economists are expecting GDP growth around a 3.2% after seeing a weak 0.7% growth rate in the first quarter of the year.
An important measure with the GDP report is the core PCE deflator, an inflation measure the Federal Reserve policy setters look at closely.
At 10:00 a.m., July's University of Michigan's consumer sentiment index is scheduled for release.
Oil prices, not surprising, rose today after adding to yesterday's scare when crude fell nearly $1 a barrel on worries a slowing U.S. economy would cut petroleum consumption.
Overseas, markets followed the U.S. closely, with the global credit crunch scare spooking investors. Asian stocks tumbled across the board, with Japan's Nikkei shedding 2.4% and Hong Kong's Hang Seng closing down 2.7%. Meanwhile, in Europe, stocks also saw declines, but already London's FTSE has recovered somewhat and is down only 0.2%. Other European markets show a similar recovery pattern, which could help carry U.S. markets when they open.
Not helping much to the attempts of recovery today is the news that Cadbury Schweppes halted the sale of its U.S. division that makes Snapple due to fact that the buyers could have problems securing funds in this climate of credit concern.
Not much news on the earnings front today, but still most notably, a stock BloggingStocks bloggers been following with interest Crocs Inc. (NASDAQ: CROX) has seen some considerable after-hours market action. CROX is up over 15% in premarket trading after reporting earnings yesterday, beating estimates and boosting outlook.
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