U.S. futures dip ahead of data, Sears in focus; Dow sheds 0.2%

Investing.com – U.S. stock futures pointed to a modestly lower open on Tuesday, amid thin year-end trading conditions as investors awaited key U.S. housing and consumer confidence data later in the day.        

Ahead of the open, the Dow Jones Industrial Average futures pointed to a loss of 0.2%, the S&P 500 futures indicated a decline of 0.1%, while the Nasdaq 100 futures pointed to a 0.3% drop.  

With most investors already away on year-end leave, trading volumes were expected to remain low, resulting in subdued trade. U.S. equity markets remained closed on Monday due to the Christmas holiday.

Shares in department store operator Sears Holdings were expected to be in focus after announcing plans to close 100 to 120 Kmart and Sears stores, citing lower sales, continued margin pressure and expense increases. The company will take fourth-quarter charges of USD1.6 billion to USD2.4 billion as a result.  

In the eight weeks to Christmas Day, sales at Kmart fell 4.4% and by 6% at Sears. Both chains have reported a decline in demand for consumer electronics, amid fears of another U.S. recession. The firm has nearly 2,200 Kmart and Sears stores across the U.S.

Meanwhile, shares in retailers were expected to be active after the National Retail Federation said that U.S. holiday season retail sales were expected to rise 3.8% to a record USD469.1 billion. While the figure was slower than last year's growth, it was stronger than its pre-season forecast.  

Financial sector stocks were expected to come under selling pressure amid lingering concerns over the threat of mass credit ratings downgrades for euro zone countries.

Ratings agency Standard & Poor's has yet to announce if it will cut ratings on any of the 15 countries it has on credit watch negative. Two independent European government sources said Friday that S&P was not expected to release its verdict on euro zone debt ratings until January.  

Meanwhile, investors were eyeing Italian three and ten-year bond auctions later this week. The yield on Italy’s ten-year bonds rose to as high as 7.13% in early European trade, topping the critical 7% threshold widely viewed as unsustainable in the long-term.

Across the Atlantic, European stock markets were mixed in thin trade. With markets in London remaining closed for an extended holiday break, trading volumes were low.
 
The EURO STOXX 50 eased down 0.1%, France’s CAC 40 edged 0.1% higher, while Germany's DAX added 0.15%.

During the Asian trading session, Japan’s Nikkei 225 Index fell 0.45% after the Bank of Japan warned about possible downside risks from the European debt crisis.

Trading volumes were low as several markets across Asia remained close, including Hong Kong, Australia and New Zealand.

Later in the day, the U.S. was to publish industry data on house price inflation, as well as a report on consumer confidence and manufacturing activity in Richmond.