NEW YORK – Stock futures slipped Wednesday as investor enthusiasm that drove stocks sharply higher earlier this month appears to be waning.
A new report indicated growth in manufacturing activity in New York slowed this month. Investors disappointed in the report sent futures lower after the report failed to meet economists' expectations for a modest increase in activity.
The market's rally during the first half of September was built largely on the economy showing modestly stronger growth than was anticipated, even though the reports suggested the recovery remains sluggish. Slow, but steady growth was enough to propel stocks higher.
Major indexes fell late in trading Tuesday to snap a four-day winning streak because of renewed worries about the strength of Europe's economy. Major European indexes fell modestly Wednesday.
The Federal Reserve is expected to report industrial production inched higher last month as a slowdown in auto manufacturing offset growth elsewhere. Economists polled by Thomson Reuters expect production at the nation's factories, mines and utilities rose 0.2 percent in August after rising 1 percent in July.
The Empire State Manufacturing Survey Index fell to 4.1, well below the 8.0 forecast by economists. A reading above zero indicates growth.
An unexpected jump in the Institute for Supply Management's manufacturing index two weeks ago helped kick off the recent rally.
Ahead of the opening bell, Dow Jones industrial average futures fell 44, or 0.4 percent, to 10,419. Standard & Poor's 500 index futures fell 5.10, or 0.5 percent, to 1,110.70, while Nasdaq 100 index futures fell 7.75, or 0.4 percent, to 1,914.75.
In Europe, Britain's FTSE 100 fell 0.5 percent, while Germany's DAX index dropped 0.7 percent. France's CAC-40 fell 0.9 percent.
Japan's Nikkei stock average surged 2.3 percent after the country's government stepped in to weaken the yen. The currency had reached a 15-year high against the dollar, which endangered the health of manufacturers like Toyota Motor Corp. and Sony Corp. that rely on exporting goods around the world. A stronger yen can make it prohibitively expensive for companies to export goods like cars and televisions, and that hurts profits.
Japan sold an undisclosed amount of yen to weaken the currency. The dollar rose 2.7 percent against the yen in morning trading.
The move by Japan could be short lived because the dollar has been weakening recently and could resume its slide. The dollar's struggles over the past few days are due, in part, to speculation the Federal Reserve might step in to start buying more Treasury bonds and mortgage securities in an effort to provide a lift to the struggling domestic economy.
U.S. Treasury prices fell Wednesday. Stocks and bonds often trade in opposite directions depending on how much risk investors are willing to take.
The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.72 percent from 2.67 percent late Tuesday. Its yield is often used to help set interest rates on mortgages and other consumer loans.