Wall Street set to dip at open

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Copy of Copy of Copy of Copy of Copy of Copy of IOL pic may10 wall street signage Reuters .

New York - U.S. stocks were set to dip at the open on Wednesday as investor caution prevailed ahead of the publication of the minutes of the latest Federal Reserve policy-setting meeting.

The S&P 500 rose on Tuesday to cap a four-day losing streak, but remained under technical pressure as it closed below its 50-day moving average for a third straight session. The benchmark closed roughly five points below that level, now at 1,657.65, which is becoming technical resistance.

Retailers led gains in the previous session and will continue to be in focus in early trading as results from companies including Lowe's and Target take center stage.

Investors have been grappling over the past several weeks with uncertainty over when the Fed will begin to wind down its $85 billion a month stimulus program. Minutes from the Fed's July meeting, which may provide clues about policymakers' plans for so-called quantitative easing, will be released at 2:00 p.m. EDT (1800 GMT).

The market is expected to drift in a tight range unless the Fed surprises with a change in course, said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

“I don't think it's likely the Fed is going to break new news, but it's certainly a concern,” he said.

“Tighter rates should reflect a better economy, and a better economy should reflect stronger earnings and revenue growth; it's that second part that's not materializing,” said Meckler.

S&P 500 futures fell 3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 29 points, and Nasdaq 100 futures lost 6 points.

Shares of Toll Brothers fell 0.5 percent in premarket trading after the largest U.S. luxury homebuilder reported a jump in revenue as the recovery in the U.S. housing market gathered pace.

The National Association of Realtors releases data on July home resales at 10:00 a.m. (1400 GMT). Economists in a Reuters survey forecast a total of 5.15 million annualized units versus 5.08 million annualized units in June.

Target warned its annual profit may be near the low end of its forecast as consumer spending remains cautious; its shares fell 1.5 percent in premarket trading.

Shares of home improvement chain Lowe's rose 4.7 percent in premarket trading after it reported a bigger-than-expected rise in profit and sales as the housing market's recovery encouraged people to spend more on their homes.

Staples reported weaker-than-expected quarterly results on dismal sales in international markets and cut its outlook for the year. Shares slumped 10.2 percent in premarket trading.

A flood of erroneous trades hit U.S. equity options markets on Tuesday as they opened for business when Goldman Sachs sent orders accidentally because of a technical error, in the latest trading problem to hit markets. -Reuters


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