World Economy

US Index Futures Fall

US Index Futures Fall US Index Futures Fall

US stock-index futures fell, with equities at an eight-week high, as Morgan Stanley joined banks posting results this season that disappointed investors, Reuters reported.

Morgan Stanley fell 4.9% in early New York trading. The lender followed Goldman Sachs Group Inc. and JPMorgan Chase & Co. in reporting a drop in bond-trading revenue. PMC-Sierra Inc. jumped 13 % as Microsemi Corp. offered to buy the company for about $2.4 billion. Weight Watchers International Inc. soared 78% after the company said Oprah Winfrey will buy a 10% stake and join the board.

Standard & Poor’s 500 Index E-mini contracts expiring in December lost 0.4% to 2,018 at 8:36 a.m. in New York, after the underlying index rose for a third straight week. Dow Jones Industrial Average futures lost 61 points, or 0.4%, to 17,054.

“For the US market, the earnings season and the expectations for a Fed rate hike are the key near-term factors,” said Otto Waser, chief investment officer at R&A Group Research & Asset Management AG in Zurich. “Expectations are still low for earnings and global companies are still suffering from a strong dollar. Still, we’re not that far away from the levels at the start of August and we could get there this quarter.”

The S&P 500 is rebounding from its worst quarter in four years, even as investor sentiment swings between concern over China’s slowdown and optimism that the Federal Reserve won’t rush to raise rates. The probability of a US rate increase this year has diminished to 40%, from 64% before the Fed’s September meeting, with March the first month for which traders price in at least even odds of a rate boost.

A report today showed China’s economy expanded quicker than economists forecast in the third quarter as the services sector offset weaker manufacturing. While the 6.9% growth in gross domestic product was the slowest since 2009, the stabilization should ease fears of a deeper downturn.