Stock futures signal bounce after sell-off
Stock index futures pointed to a higher open on Wall Street on Wednesday following the previous session's sharp sell-off, with futures for the S&P 500 up 0.51 percent, Dow Jones futures up 0.34 percent and Nasdaq 100 futures up 0.54 percent at 0925 GMT.
The United States had its triple-A rating confirmed by two key ratings agencies on Tuesday after Washington struck a last-minute deal to avoid a debt default, but threats of future downgrades remain.
Moody's Investors Service and Fitch Ratings maintained U.S. ratings for now, but said more deficit-reduction measures were needed for the government to put its finances in order and retain the coveted rating. Underscoring that threat, Moody's assigned a negative outlook to the Aaa rating, which means a downgrade is possible in the next 12 to 18 months.
China's central bank governor urged Washington on Wednesday to act responsibly to deal with its debt issues, saying uncertainty in the U.S. Treasuries market would undermine the international monetary system and hamper global growth.
Benchmark U.S. Treasury yields hit a nine-month low, and the yield curve flattened further on Wednesday as more investors fled equities for bonds on heightened anxiety about a global slowdown and the deteriorating debt crisis in Europe.
Banking stocks will be in focus after French lender Societe Generale
Bank of America Corp
Following a string of bleak economic data, investors braced for the monthly ADP jobs figures, due at 1215 GMT, a harbinger for Friday's non-farm payrolls.
On the earnings front, investors awaited results from companies including Constellation Energy Group
European stocks were down about 0.9 percent in morning trade, led lower by a sell-off in mining shares such as BHP Billiton
Growth in the euro zone's dominant service sector eased to its weakest rate in nearly two years in July as backlogs of work fell for the first time since late last year, a key survey showed on Wednesday.
The Swiss National Bank cut its interest rate target band on Wednesday in a surprise move to stem the rapid rise of the Swiss franc, which investors have flocked to, seeking harbor from the European and U.S. debt crises.
The S&P 500 turned negative for the year on Tuesday as the wrangling over the U.S. debt ceiling faded and investors turned their attention to the stalling economy. The broad-based index fell for a seventh day and crashed through its key 200-day moving average in an ominous sign for markets. The seven days of losses mark the longest losing streak since October 2008.
The Dow Jones industrial average <.DJI> dropped 265.87 points, or 2.19 percent, to 11,866.62. The Standard & Poor's 500 Index <.SPX> dropped 32.89 points, or 2.56 percent, to 1,254.05. The Nasdaq Composite Index <.IXIC> dropped 75.37 points, or 2.75 percent, to 2,669.24.
(Reporting by Blaise Robinson; Editing by Will Waterman)
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