Wall Street heads for lower open after advance
NEW YORK -- Wall Street headed for a slightly lower open Wednesday as investors awaited more evidence on the health of the economy.
Stock futures reflected the uncertainty in overseas markets, where buying was subdued by concerns over the sustainability of a four-month rally. Key market gauges fell almost 2% in London and more than 1% in Paris after finishing with a small gain in Tokyo.
Interest rates on Treasury securities retreated early Wednesday and oil futures edged below $68 a barrel in electronic trading.
Investors who have sent stocks up more than 30% since early March have been encouraged by improving economic data. But many analysts warn that the market needs to see real signs of growth before it can move much higher.
Data on factory orders for April and a reading on the service sector are expected later Wednesday morning. Meanwhile, Federal Reserve Chairman Ben Bernanke will testify before Congress about the state of the economy.
Treasury debt prices extended gains Wednesday after the ADP Employer Services report showed a larger than expected decrease in private-sector jobs in May, and revised higher the level of April job losses. Unemployment has been one of Wall Street's biggest worries about the economy.
In recent months, investors have been taking their cues largely from economic reports, searching for confirmation that the recession will end some time this year. A slate of upbeat reports this week on manufacturing, consumer spending and home sales have helped send the market higher.
On Tuesday, stocks extended a four-day winning streak with modest gains following an unexpectedly big spike in pending home sales — the latest sign that the battered housing market is starting to turn around.
Luxury home builder Toll Brothers said Wednesday it has begun to see signs that buyers are re-entering the new home market. Still, the company reported a slightly bigger-than-expected loss of $83.2 million for its fiscal second quarter as it continued to reduce the value of land and unsold homes on its books.
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