US STOCKS-Futures dip after budget deal on Fed stimulus worry

Reuters

By Angela Moon

NEW YORK, Dec 11 (Reuters) - U.S. stock index futures edgedlower on Wednesday as a provisional budget deal reached inWashington compounded expectations the Federal Reserve willstart scaling back its stimulus program soon.

* A bipartisan budget deal announced in the U.S. Congresslate Tuesday, though modest in spending cuts, would end threeyears of impasse and fiscal instability in Washington thatculminated in October with a partial government shutdown.

* While the agreement removed a key uncertainty hanging overmarkets, it strengthened a view that the U.S. central bank maysoon start to wind down its $85 billion-a-month stimulusprogram.

* Although the benchmark S&P 500 hit a record close earlierin the week, investors have hesitated to make big bets ahead ofnext week's Federal Reserve meeting, in the absence ofmarket-moving economic data. The Federal Open Market Committeemeeting is set for Dec. 17-18.

* S&P 500 futures fell 1.5 points were slightly belowfair value, a formula that evaluates pricing by taking intoaccount interest rates, dividends and time to expiration on thecontract. Dow Jones industrial average futures fell 18points and Nasdaq 100 futures lost 5 points.

* In company news, Costco Wholesale Corp sharesslipped 1.7 percent in premarket trading after the retailer'sfirst-quarter profit missed Wall Street estimates due to lowergasoline prices and weak foreign currencies.

* Home Depot Inc said it sees sales growth ofapproximately 5 percent in 2014.

* Economic data expected on Wednesday includes the TreasuryDepartment's monthly budget data for November at 2:00 p.m. EST(1900 GMT).

* Despite retreating on Tuesday, the S&P 500 held above keytechnical indicators, including its 14-day moving average.Volume remained below average, even for a thinly traded month.

View Comments (0)