Futures slip after China trade data

Mon Mar 12, 2012 8:16am EDT
 
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By Chuck Mikolajczak

NEW YORK (Reuters) - Stock index futures edged lower on Monday as economic data in China gave investors reason to pause after a three-day rally.

China's trade balance plunged $31.5 billion into the red in February as imports swamped exports to leave the largest deficit in at least a decade and fuel doubts about the extent to which frail foreign demand or seasonal distortion drove the drop.

The data cast some doubt on global economic growth prospects after Friday's payrolls report pointed to an improving domestic economy and pushed equities to their fourth straight weekly gain.

Investors will also eye Tuesday's statement from the Federal Open Market Committee for any indications in the direction on monetary policy.

"With little fresh news to tip the scales either way, the market is looking for the next theme to take hold - the market is sitting right at a key resistance area looking for a push through what has been a significant hurdle," said Andre Bakhos, director of market analytics at Lek Securities in New York.

"The market has had a clear upside bias, and once this hurdle is surpassed there is the potential for a surge higher, perhaps to 1,440" for the S&P 500 index, Bakhos said.

China's central bank also said the country has ample room to tweak policy to support credit growth in the face of volatile foreign capital flows that will inevitably see market forces play a greater role in determining the value of the yuan currency.

S&P 500 futures fell 2 points and were slightly above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures shed 1 point, and Nasdaq 100 futures lost 4.75 points.   Continued...

 
The Wall Street sign is seen outside the New York Stock Exchange, March 26, 2009. REUTERS/Chip East