Stock futures slide as investors continue sell-off

[August 20, 2010]  NEW YORK (AP) -- Stock futures dipped Friday as investors continued a sell-off that began a day earlier over worries about the pace of economic recovery.

Investors are finding little reason to buy Friday. There are no reports due out that could negate Thursday's disappointing news that growth in the domestic economy continues to slow. The Dow Jones industrial average fell 144 points Thursday.

With investors moving out of stocks, interest rates again dipped in the bond market. Oil prices also continued to fall because of worries that future demand would wane if economic growth remains tepid.

Overseas markets also fell, reacting to reports Thursday that initial claims for unemployment benefits in the U.S. rose last week and manufacturing in the Mid-Atlantic region shrank. Earlier this year, traders were worried Europe's economy would slow down so much that it would put a drag on a global recovery. Now, economic reports indicate it's the U.S. economy that investors are worried will slow worldwide growth.

Economic reports in recent months have shown private employers are largely skittish about hiring new workers because they are unsure how strong business will be in the coming quarters. That, in turn, has people worried about their jobs and spending less. But until spending picks up, unemployment could remain high.

The unemployment rate remains at 9.5 percent and analysts widely agree it needs to fall to lead to a stronger rebound.

Ahead of the opening bell, Dow Jones industrial average futures fell 54, or 0.5 percent, to 10,181. Standard & Poor's 500 index futures fell 6.30, or 0.6 percent, to 1,065.00, while Nasdaq 100 index futures fell 10.25, or 0.6 percent, to 1,809.75.

Volume remains exceptionally low, which has added volatility to the market.

Bond prices rose as investors sought the safety of government bonds, which drove interest rates lower. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.54 percent from 2.58 percent late Thursday. Its yield is often used to help set interest rates on mortgages and other consumer loans.

In corporate news, Dell Inc. reported a better-than-expected profit Thursday, due largely to increased technology spending by businesses. However, sales in its consumer personal computer division were flat compared with the same quarter last year, further evidence that shoppers are hesitant to buy new goods.

Corporate mergers and acquisitions activity gave stocks a lift early this week, but has been since overshadowed by weak economic reports. Mergers and acquisitions activity is usually seen as a hopeful sign for the economy because it means companies are willing to spend money, betting that their businesses and the economy will grow in the coming quarters.

Benchmark crude for October delivery fell $1.17 to $73.60 a barrel in electronic trading on the New York Mercantile Exchange. Oil prices have steadily dropped throughout August.

Overseas, Britain's FTSE 100 fell 0.5 percent, Germany's DAX index dropped 0.7 percent, and France's CAC-40 fell 0.7 percent. Japan's Nikkei stock average fell 2 percent.

[Associated Press; By STEPHEN BERNARD]

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