Dow May Pause Ahead of FOMC Minutes

LONDON -- The major U.S. indexes look set to open flat today: Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open up by a nominal four points this morning, while the S&P 500 (SNPINDEX: ^GSPC  ) may open half a point lower.

European markets slipped this morning following downbeat overnight data from China, where exports unexpectedly dropped by 3.1% in June while imports fell by 0.7%. That's the biggest monthly drop in exports since 2009, and it has raised fears that following a recent crackdown on manufacturers who were artificially inflating their export figures, an underlying decline in Chinese industrial activity is now becoming visible. In the eurozone, France and the Netherlands both reported a fall in industrial output in May, and although Italian industrial output edged up by 0.1% in May, analysts had expected a bigger increase. As of 7 a.m. EDT, the FTSE 100 is down by 0.33%, France's CAC 40 is down 0.37%, and Italy's FTSE MIB is down 0.78%.

U.S. investors are also likely to pay close attention to the latest data from China, but the latest Federal Open Market Committee meeting minutes, which are due at 2 p.m. EDT today, may have a bigger impact. Investors will look carefully at the minutes for any further clues as to the FOMC's collective view on the timing and speed with which the Fed should begin to taper its bond-buying program. Today's other main economic report is May's wholesale inventories, due at 10 a.m. EDT.

In corporate news, Family Dollar Stores (NYSE: FDO  ) reported third-quarter earnings of $1.05, beating analyst expectations of $1.05. Same-store sales rose 2.9% last quarter, and the company expects same-store sales to rise another 2% in the current quarter. Family Dollar's profit margin shrank slightly as customers shifted toward lower-margin everyday staples. Shares in Family Dollar are up 2.4% in premarket trading.

Fastenal is also expected to report before markets open. Yum! Brands is expected to report second-quarter earnings of $0.54 per share after the closing bell tonight, according to consensus forecasts, while Chevron is due to update the markets with its second-quarter production output later today.

Hewlett-Packard stock may be actively traded today. The tech giant's share price is up by 2.7% in premarket trading this morning, possibly helped by a broker upgrade yesterday. Cliffs Natural Resources is 4.5% higher in premarket trading; Cliffs' shares closed up 2.7% yesterday following news that the firm's president and CEO, Joseph Carrabba, is to stand down.

Finally, let's not forget that the Dow's daily movements can add up to serious long-term gains. Indeed, Warren Buffett recently wrote, "The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions." If you, like Buffett, are convinced of the long-term power of the Dow, you should read "5 Stocks To Retire On." Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.


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