US stock futures drop amid stimulus concerns

U.S. stock-index futures retreated, forewarning benchmark indexes will retreat further from a record high after posting their worst weekly losses since June.

“It was below my expectations,” Takahiro Sekido, a Tokyo-based strategist at Bank of Tokyo-Mitsubishi UFJ Ltd., told Mark Barton and Anna Edwards on Bloomberg Television, referring to Japan’s quarterly economic growth. “The capital expenditure, or investment stance, of Japanese corporates looks very cautious and weak. That was negative.”

Japan’s gross domestic product rose an annualized 2.6% in the three months through June, the Cabinet Office reported today in Tokyo. However, that was slower than the 3.8% pace recorded in the first quarter and the 3.6% rate of expansion that economists had estimated. Corporate spending fell 0.1% from the previous three months for its sixth consecutive quarter of contraction.

Investors have turned their attention to economic indicators in order to predict whether Fed is going to reduce its bond purchasing program as soon as this September. Charles Evans, Sandra Pianalto and Richard Fisher, regional Fed presidents in Chicago, Cleveland and Dallas, said during the week that the central bank may be closer to tapering as the labor market recovers.

This week producer and consumer price indexes are due to be reported accompanied with housing data and Federal officials statements which are expected to shed some light to whether Fed is convinced by positive economic data.

Earnings season is coming to its end as 449 companies in the S&P 500 have reported quarterly results so far. Among them, 72% have exceeded analysts’ profit estimates and 56% have beaten sales projections.

Broadcom lost 0.6% to $25.90 after Goldman Sachs downgraded the maker of chips that connect mobile devices to the Internet to “neutral” from “buy”. Broadcom will have to find new customers to maintain market share for its chips as sales slow to Samsung Electronics Co., Goldman Sachs analysts led by James Schneider wrote in a note, cited by Bloomberg.

Hecla Mining, which operates silver mines in Alaska and Idaho, added 3% to $3.40. Silver rose to its highest price in seven weeks today, while gold increased to its highest price in more than a week.