Stock futures fall as G-20 summit convenes

[November 11, 2010]  NEW YORK (AP) -- Stock futures slipped Thursday as world leaders attempt to come up with plans to strengthen a weak global economy.

A disappointing outlook from Cisco Systems Inc. rattled technology shares, sending tech-heavy Nasdaq 100 futures much lower than other index futures.

Volume could be light because of the Veterans' Day holiday, which would exaggerate moves. Bond trading is closed for the holiday and the government is closed so there will be no readings on the economy.

The Group of 20, which encompasses leaders from major rich and developing nations, are meeting in South Korea and trying to hammer out plans to help support a global recovery that has accelerated in some countries like China while more developed countries like the U.S. have struggled to rebound.

Currency manipulation, trade gaps and protectionism are the major topics the group is expected to discuss. Some countries criticized the U.S. last week after the Federal Reserve announced a bond-buying program that effectively cut the value of the dollar. The U.S. and others have criticized China for holding its currency artificially low.

A weak currency helps a country's exports because they become cheaper to sell overseas. That can lead to big trade imbalances and protectionist reactions from government's trying to keep their own countries' goods from being priced out of the world market.

Leaders are trying to sort through those issues to avoid a string of currency devaluations that could stunt a global recovery.

Ahead of the opening bell, Dow Jones industrial average futures fell 36, or 0.3 percent, to 11,266. Standard & Poor's 500 index futures fell 5.20, or 0.4 percent, to 1,208.90, while Nasdaq 100 index futures fell 14.50, or 0.7 percent, to 2,160.00.

The dollar did gain ground against the euro Thursday, but slipped against Japan's yen. The Japanese government has flooded currency markets multiple times in recent months with yen to cut the value of the currency as it hovers near a 15-year low against the dollar.

The euro has struggled in recent days because of fresh concerns about government debt problems, particularly in Ireland.

A steadily declining dollar over the past two months has helped funnel money into stocks and commodities as investors seek better returns.

In corporate news, for the second straight quarter Cisco provided investors with a disappointing sales forecast that has driven its shares sharply lower in pre-opening trading. Cisco shares fell $2.86, or 11.7 percent, to $21.63.

The computer network equipment maker said its revenue will rise by less than half of what analysts' had predicted for its November through January quarter. There are worries that smaller competitors are cutting into Cisco's large market share.

[Associated Press; By STEPHEN BERNARD]

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