Posted By RichC on August 18, 2011
U.S. stock futures slipped further into the red, setting up the market for a sharply lower open, after rising inflation and greater worries on unemployment added to concerns about the global economy and Europe’s ongoing sovereign debt problems.
Less than an hour before the opening bell, Dow Jones Industrial Average futures fell 218 points to 11163, while Standard & Poor’s 500-stock index futures dropped 27 points to 1163 and Nasdaq 100 futures lost 47 points to 2128. Prior to the data, Dow futures had been down 208 points, while S&P 500 futures fell 26 points and Nasdaq futures shed 49 points. Changes in stock futures don’t always accurately predict early stock moves after the open.
The declines came as new jobless claims rose above 400,000 last week, the latest sign of a persistently weak U.S. labor market. Initial jobless claims rose by 9,000 to a seasonally adjusted 408,000 in the week ended Aug. 13.
Meanwhile, consumer inflation resumed its climb in July as gasoline prices rebounded and food costs continued to rise. Consumer prices rose 0.5% from June, the largest monthly increase since March. Underlying inflation, which excludes volatile energy and food costs, rose by a monthly 0.2% in July, in line with expectations. On an annualized basis, consumer prices were up by 3.6% in July, above the Federal Reserve’s target.