US pre-open: Futures edge higher despite disappointing Chinese data

LONDON (ShareCast) - (ShareCast News) - US stock futures pointed to a positive open on Wednesday despite disappointing economic news from China, as Wall Street looked to erase the previous session's losses. The Dow Jones Industrial Average is expected to open approximately up 55 points, while the S&P 500 and the Nasdaq (NasdaqGS: NDAQ - news) are set to begin the session respectively five and 15 points higher.

Chinese PMI disappoints Negative data out of China looked set to drag US markets lower, after Caixin's preliminary Chinese manufacturing sector purchasing managers' index dipped to a reading of 47.0 for September - a 78-month low - down from 47.3 in August and compared with expectations for a reading of 47.5.

"Today's weaker-than-expected PMI will add to mounting concerns over Chinese growth," said Julian Evans-Pritchard, China economist at Capital Economics.

"That said, Caixin's manufacturing PMI has not provided a particularly good reading of the health of the broader economy in recent months and so it is still too early to tell whether or not the Chinese economy has stumbled in September." However, there was more positive news from the Eurozone, where the region PMIs missed forecasts but indicated the region remained on track to recovery, pushing European stocks firmly higher.

"Everything seems to be locked in a delicate balance of buyers and sellers, even more than usual," said IG (LSE: IGG.L - news) 's senior market analyst Chris Beauchamp.

"And every dip has been furiously bought, but every rally has been sold. You really get the sense that both sides are locked in a stalemate." Wednesday data In line with the first two days of the week, the economic calendar offers little to get excited about on Wednesday, with Markit (NasdaqGS: MRKT - news) 's manufacturing purchasing managers' index, due at 1445 BST, the highlight of the session.

Investors will also hear from Atlanta Federal Reserve president Dennis Lockhart, a voting member of the FOMC, who is due to speak in Columbus (Copenhagen: COLUM.CO - news) , Georgia, at 1730 BST.

Meanwhile, European Central Bank president Mario Draghi will give his quarterly hearing before the Committee on Economic and Monetary Affairs at 1400 BST.

In company news, JC Penney (NYSE: JCP - news) slid 0.64% ahead of the bell after sources told the Wall Street Journal the group was looking for a new chief merchant to replace Elizabeth Sweney.

Insurance group MetLife (NYSE: MET - news) fell 1.49% in pre-market trading, after saying late on Tuesday it will raise its stock buyback programme to $1bn on top of the $1bn it bought back in the first three months of the year.

Elsewhere, the dollar gained 0.30% and 0.14% against the pound and the yen respectively but fell 0.32% against the euro, while gold futures lost 0.03% to $1,124.50.

Oil prices edged higher, as West Texas Intermediate climbed 0.64% to $46.66 a barrel, while Brent gained 0.45% to $49.30 a barrel.