Before the bell: Stocks set for lower start ahead of data

Posted Jun 3rd 2009 7:45AM by Melly Alazraki
Filed under: Before the Bell, International Markets, Market Matters, Economic Data, Oil, Housing, Federal Reserve

U.S. stock futures declined Wednesday morning, indicating Wall Street could stumble at the open as investors awaited Federal Reserve chairman Ben Bernanke's testimony before the House Budget Committee and a slew of economic data, including private sector employment numbers.

While we've seen great optimism in the market recently, with stocks nearly erasing any yearly declines, as green shoots and improving economic data fueled hopes of a recovery, still many believe it is not enough and the market is overbought. So much that Credit Suisse argued that bonds are a better place to be than stocks with the recent rise in yields.

Meanwhile, overseas, Asian stocks were generally higher, with Chinese shares closing at a 10-month high. European stocks were generally lower after reports that European consumer spending and exports contracted the most in at least 14 years in the first quarter and investment slumped as the worst global recession in more than six decades prompted companies to cut output and jobs. Gross domestic product shrank 2.5 percent from the fourth quarter.

In the U.S., mortgage rates rose sharply last week, and the volume of mortgage applications filed fell a seasonally adjusted 16.2 percent compared with the previous week, the Mortgage Bankers Association said Wednesday.

Oil prices slipped below $68 a barrel Wednesday on more profit taking, but prices remained near seven-month highs on expectations demand will grow the economic recovery starts. At 10:30 a.m. today, traders will also focus on weekly crude inventories.

Economic data due out today:

8:15 AM: May ADP Employment Change
10:00 AM: April Factory Orders
10:00 AM: May ISM Services

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