Wall Street headed for lower open after advance

[June 03, 2009]  NEW YORK (AP) -- Wall Street headed for a slightly lower open Wednesday as investors around the globe awaited more evidence on the health of the economy.

U.S. stock futures reflected the uncertainty in overseas markets, where buying was subdued by concerns over the sustainability of a four-month rally. Key market gauges in London and Paris were down more than 1 percent in midday trading in Europe after stocks gained in Tokyo.

Investors who have sent U.S. stocks up more than 30 percent since early March have been encouraged by improving economic data. But many analysts warn that the market needs to see real signs of growth before it can move much higher.

Data on factory orders for April and a reading on the service sector are expected later Wednesday morning. Federal Reserve Chairman Ben Bernanke will also testify before Congress about the state of the economy.

Ahead of the market's open, Dow Jones industrial average futures fell 28, or 0.3 percent, to 8,686. Standard & Poor's 500 index futures fell 4.40, or 0.5 percent, to 938.20, while Nasdaq 100 index futures dipped 6, or 0.4 percent, to 1,472.50.

In recent months, investors have been taking their cues largely from economic reports, searching for confirmation that the recession will end some time this year. A spate of upbeat reports this week on manufacturing, consumer spending and home sales have helped send the market higher.

On Tuesday, stocks extended a four-day winning streak with modest gains following an unexpectedly big spike in pending home sales -- the latest sign that the battered housing market is starting to turn around.

Luxury home builder Toll Brothers Inc. said Wednesday it has begun to see signs that buyers are re-entering the new home market. Still, the company reported a slightly bigger-than-expected loss of $83.2 million for its fiscal second quarter as it continued to reduce the value of land and unsold homes on its books.

Further tests of the market's resilience will come later this week. Retailers will report May sales results on Thursday, while on Friday the Labor Department will give its monthly jobs report -- one of the most closely watched indicators of the economy's health.

Interest rates on long-term Treasurys fell further early Wednesday after surging last week. The yield on the 10-year Treasury note, which is used as a benchmark for home mortgages and other consumer loans, slipped to 3.58 percent from 3.62 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 25 cents to $68.30 in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average added 0.4 percent. In European trading, Britain's FTSE 100 fell 1.8 percent, Germany's DAX index was down 0.7 percent, and France's CAC-40 fell 1.1 percent.

[Associated Press; By SARA LEPRO]

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