Futures fall ahead of release of Fed minutes

AP News
Posted: Aug 21, 2013 9:25 AM
Futures fall ahead of release of Fed minutes

NEW YORK (AP) — U.S. stock futures slid Wednesday ahead of the release of the latest minutes from the Federal Reserve and more troubling news from the retail sector.

Target issued a meager profit outlook and a 13 percent drop in quarterly income. Shares of specialty retailer American Eagle Outfitters tumbled, also on a weak forecast.

Dow Jones industrial futures fell 37 points to 14,961. S&P futures have lost 4.2 points to 1,646.40. Nasdaq futures slipped 8.5 points to 3,072.50.

The major averages have been pressured by the anticipation that the Fed will begin winding down its bond-buying program, $85 billion a month, which has kept interest rates extremely low and markets flush with cash.

The housing sector has been booming, partly because of the Fed program, but there are hints that the sales may be easing somewhat.

The Commerce Department reported last week that builders started work on fewer single-family homes and sought fewer permits to build more last month.

The National Association of Realtors is expected to report that sales of previously owned homes likely rose last month to levels not seen in four years.

However, while the recovery in housing has been solid, the report won't fully account for rising mortgage rates.

Many expect higher rates to tug on sales in coming months.

For now, housing-related companies are doing well. Lowe's Cos. reported a 26 percent jump in second-quarter net income and raised its full-year forecast.

The high-end homebuilder Toll Brothers posted lower third-quarter profits Wednesday, though that is largely due to a tax expense.

Home deliveries jumped, and revenue rose sharply.

Shares of American Eagle Outfitters fell 9 percent after it reported quarterly results that showed it has had to slash prices because shoppers are so reluctant to spend.

Shares of Target fell more than 3 percent before the opening bell.