US stock-index futures decline amid stimulus tapering talk

U.S. stock-index futures retreated, indicating the Standard & Poor’s 500 Index will fall for a third day, amid investor speculation the Federal Reserve will pare bond purchases as the economy strengthens.

Futures on the S&P 500 expiring in September slid 0.4 percent to 1,687.7 at 11:58 p.m. in London. The index sank the most in six weeks yesterday as retailers’ results disappointed and trade data fueled concern the Fed may taper stimulus this year. Future contracts on the Dow Jones Industrial Average decreased 54 points, or 0.4 percent, to 15,420 today.

“You may think that the tapering talk was already priced into the markets, but traders are certainly not convinced by this idea,” said Ava Trade chief market analyst Naeem Aslamat in e-mailed comments on Tuesday, which decreased Dow Industrials with nearly 100 points.

Eleven members of the S&P 500 report results today, including Time Warner Inc. Of the 424 companies in the gauge to have already reported, 72% have exceeded analysts’ profit estimates and 56% have beaten sales projections, data compiled by Bloomberg show.

Rockwell’s Cardillo said, cited by The Wall Street Journal, that investors need to remember that August volumes are pretty light, which contributes to “overexaggerated volumes.” What the Dow industrials has lost over two days of selling is “nothing to get excited about. It’s a lot of noise and a very quiet period,” he said.

But the fallout was deeper for some global markets on Wednesday. Europe stocks lost around 0.5%, while in Japan, the Nikkei Stock Average JP:NIK -4.00% closed 4% lower as the yen rose against the dollar.

In US corporate news, First Solar plunged 11%to $41.75. Second-quarter net income fell to $33.6 million from $111 million a year earlier, the Tempe, Arizona-based company said. Excluding one-time items, per-share profit was 14 cents below the 53-cent average of 16 analysts’ estimates compiled by Bloomberg.

Zillow declined 8.5% to $83.04 in early trading. The operator of the largest U.S. real-estate information website reported a second-quarter loss on higher costs related to advertising and acquisition-related compensation.

Disney retreated 2.9% to $65.13. The world’s biggest entertainment company said third-quarter profit was little changed from the same time last year amid costs to market the box-office disappointment “The Lone Ranger” and shrinking revenue at ABC television network. Net income rose to $1.85 billion, or $1.01 a share, from $1.83 billion, or $1.01, a year earlier. Profit came to $1.03 a share excluding items.