US pre-open: Futures point to lower open as dollar relinquishes gains

LONDON (ShareCast) – Dow Futures pointed to a slightly lower open on Wednesday, as investors awaited a report on durable goods. The Dow Jones Industrial Average is expected to open approximately 67 points down, while the S&P 500 and the Nasdaq are expected to begin the session 0.3 and 7.75 points down respectively.

Stocks in the US closed lower on Tuesday as better-than-expected economic data raised uncertainty over interest rate policy and resulted in a stronger dollar.

However, on Wednesday, the greenback was retreating, losing 0.76% against the euro and falling 0.58% and 0.25% against the pound and the yen respectively, while gold futures gained 0.21% to $ 1,193.90 “Currency movements will likely be focus again on Wednesday ahead of the durable goods report for February which showed some signs of a turnaround in January after declines in the fourth quarter,” said CMC Markets analyst Jasper Lawler.

“Another strong economic report could put US equities under pressure because of the possible implications for tighter monetary policy.” The highlight of the economic calendar is a report on durable goods orders for February, which is released at 12:30 GMT. Analysts predict orders rose 0.2% in February after a 2.8% increase a month earlier.

Meanwhile, applications for US home mortgages rose in the week to 20 March, as interest rates declined to their lowest level since February.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity climbed 9.5% last week.

In company news, Kraft Foods (NasdaqGS: KRFT – news) was making waves ahead of the opening bell, surging over 35%, after announcing a merger with HJ Heinz Company . The deal will create the third largest food and beverage company in the US.

Software (LSE: 0NJS.L – news) company Kofax soared over 45% in pre-market trading after confirming it had agreed to be taken over by printing giant Lexmark International (NYSE: LXK – news) in a deal worth approximately $ 1bn.

Oil prices edged forward ahead of crude-stockpile data from the US Energy Information Administration due out later on Wednesday. Brent crude gained 1% to $ 55.68 a barrel, while West Texas Intermediate rose 0.36% to $ 47.68 a barrel.