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US and European market indices drop

12 August 2009 08:25 (UTC +04:00)

Baku - APA-Economics. Stock futures are little changed Tuesday as the Federal Reserve begins a two-day meeting that could provide new signs into how the economy is faring.
A new report showing industrial production surged in the second quarter had little effect on futures trading.
After a steep run-up in recent weeks on the strength of better-than-expected earnings, investors have paused amid a lull in new economic and profit data.
Overseas markets were mixed as new economic reports showed China’s stimulus measures were helping buffer the country from the global downturn, though weak fundamentals persist.
In the U.S., investors are turning their attention to the Fed’s two-day meeting that kicks off Tuesday.
It is widely expected the Fed will hold interest rates steady at near zero when they end their meeting Wednesday, but the group’s economic assessment will be closely studied to determine how the economy is faring.
Ahead of the opening bell, Dow Jones industrial average futures fell 18, or 0.2 percent, to 9,302. Standard & Poor’s 500 index futures declined 2.40, or 0.2 percent, to 1,005.10, while Nasdaq 100 index futures fell 4.50, or 0.3 percent, to 1,608.00.
Meanwhile, bond prices rose slightly as the Treasury Department prepares this week to auction off a record $75 billion in debt. The auctions start Tuesday with the sale of $37 billion in three-year notes.
Investors will be keeping a close eye on demand for the new debt. Fewer buyers could force the government to increase the interest it pays, which would drive up borrowing costs for consumers and slow an economic recovery.
The yield on the three-year note, which moves opposite its price, declined to 1.77 percent from 1.78 percent late Monday. The yield on the benchmark 10-year Treasury note fell to 3.77 percent from 3.78 percent late Monday.
The dollar was mixed against other major currencies, while gold prices rose.
Overseas, Japan’s Nikkei stock average rose 0.6 percent. In afternoon trading, Britain’s FTSE 100 fell 0.2 percent, Germany’s DAX index fell 0.3 percent, and France’s CAC-40 declined 0.01 percent.