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US STOCKS-Futures point to lower open, but data supports

Source : REUTERS
Last Updated: Wed, Jul 03, 2013 13:00 hrs

* ADP report and jobless claims both top forecasts

* Crude oil jumps above $100 per barrel on unrest in Egypt

* S&P 500 struggling to break through 50-day moving average

* Futures down: Dow 19 pts, S&P 500 4.5 pts, Nasdaq 7.25 pts

By Ryan Vlastelica

NEW YORK, July 3 (Reuters) - U.S. stock index futures indicated a lower open on Wednesday, tracking international weakness amid concerns about the pace of global economic growth, though futures were off their lows of the session following some encouraging data.

Private employers added 188,000 jobs in June, far more than had been expected, a report showed. In addition, initial jobless claims fell by more than expected in the latest week. Both data points were encouraging going into Friday's closely watched jobs report.

Financial shares may be among the most active on Wednesday, as the group is closely tied to economic growth forecasts. Bank of America, Citigroup and JPMorgan Chase & Co all edged lower in premarket trading.

Many market participants are out of the office during an abbreviated trading day Wednesday ahead of the Fourth of July holiday. U.S. financial markets will reopen on Friday.

Shares in China fell after a read on the country's services sector compounded concerns about slowing growth momentum, while European shares tumbled amid a political crisis in Portugal that sent the country's bond yields soaring.

"There's a lack of visibility in markets with all the global issues out there, and while the data is positive, it also isn't the kind of strong rebound we'd love to see," said Wayne Kaufman, chief market analyst at Rockwell Securities in New York.

"It is very difficult to project earnings in this environment, and that's why we've been unable to break above resistance."

S&P 500 futures fell 4.5 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 19 points and Nasdaq 100 futures fell 7.25 points.

The S&P 500 is 3.3 percent below its May 21 record closing high of 1,669.16, but has been unable to close above its 50-day moving average of 1,623.94 since June 20.

The Institute for Supply Management's June read on the services sector, due at 10:00 a.m. EDT (1400 GMT), will also be closely scrutinized. The report is seen coming in at 54, compared with 53.7 in the previous month.

Economic data has been a significant market mover in recent weeks as investors attempt to gauge when the U.S. Federal Reserve will begin pulling in its bond-buying stimulus program, which has been credited with fueling the market's gains this year. Bullish data has led to market declines as traders worry a strong economy will mean a faster end to the policy.

In the upcoming nonfarm payroll report, analysts expect 165,000 jobs to have been added in June, below the 175,000 added in May.

Crude oil prices rose 2 percent to $101.57 a barrel, a 14-month high, on concerns that political unrest in Egypt could destabilize the Middle East and disrupt supply.

"The spike in oil may act as a near-term positive for energy companies, but this isn't related to increased demand, so there's no economic benefit to it," said Art Hogan, managing director at Lazard Capital Markets in New York.

Insurance companies will be in focus after the Obama administration said it wouldn't require employers to provide health insurance for their workers until 2015, delaying a key provision of the healthcare reform law by a year.

In corporate news, Michael Dell has been advised to raise his $24.4 billion offer for Dell Inc, coming under further pressure as billionaire investor Carl Icahn revealed he had committed more than $3 billion to back an alternative proposal.

Avon Products Inc sold its Silpada Designs jewelry business for $85 million, three years after buying it for $650 million.




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