US futures heading lower on dour forecast for Asia
NEW YORK (AP) — U.S. stock futures dipped Monday as economists grow increasingly pessimistic about the outlook for Asia, as well as expectations for a leaden performance from major U.S. corporations as the earnings season kicks off.
Dow Jones industrial futures gave up 42 points to 13,494. The broader S&P futures slid 5.3 points to 1,450.20, and Nasdaq futures fell 13.75 points to 2,790.50.
The World Bank on Monday warned of the possibility of a "more pronounced slowdown" in China, the world's second largest economy, and it cut its growth forecast for Asia.
If Asia takes a turn for the worse, it could drag down the U.S. economy. One of the few bright points for the U.S. during the recession was tremendous growth from developing nations in Asia and other regions of the world for exports.
The bank cut this year's growth outlook for developing Asia-Pacific economies to 7.2 percent, down from its May forecast of 7.6 percent. The bank cut its forecast for China, the region's biggest economy, to 7.7 percent from May's 8.2 percent.
Major U.S. corporations begin posting results for the latest quarter this week, starting with Alcoa on Tuesday.
FactSet says companies in the Standard & Poor's index are expected to post an overall profit decline for the first time in 11 quarters.
However, some of those expected declines are being offset by expectations of another intervention from the U.S. Federal Reserve, which has indicated that it stands ready to act if there are not more signs of recovery in a fragile economy.
Two big banks, JPMorgan Chase and Wells Fargo, post earnings Friday.