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Pre-Market Primer: Imports Make Biggest Gains in US Auto Market


Americans bought more cars this summer, but domestic brands didn't shine.

MINYANVILLE ORIGINAL Stock futures barely budged today ahead of a report that is likely to show that the US manufacturing made modest gains in August.

Spanish and Italian bond yields plummeted after news that European Central Bank President Mario Draghi plans to buy government bonds from peripheral countries with maturities of up to three years. Draghi's rationale is that short-term bond purchases do not violate the ECB's mandate because they cannot be considered direct state financing by the ECB. Draghi had previously hinted in August that the ECB would buy short-term bonds to bring down that side of the yield curve and help governments such as Spain and Italy meet obligations without resorting to unsustainably high borrowing costs that that catalyzed Greece's financial destruction.

Draghi is expected to make a major statement clarifying the bond purchases at a press conference on September 6. Economists are predicting that the ECB will lower benchmark interest rates from 0.75% to 0.5% on Thursday.

European stocks declined today after yesterday's rally and Moody's cut its outlook for the European Union to negative from stable. Moody's also went negative on the debt of Germany, France, the UK, and the Netherlands, the eurozone's AAA-rated countries. Asian stocks declined after a report showed that Chinese manufacturing declined more than expected. Chinese manufacturing PMI came in at 49.2. The same indicator for Germany rose to 44.7. A reading below 50 signals contraction.

At 10:00 a.m. EDT, traders will get the latest ISM manufacturing data for the United States. The index is expected to rise to 50 for August from 49.8. Construction spending is projected to show an increase of 0.4%. in July.

Before the opening bell, stock futures were hardly changed. Futures on the Dow (^DJI) rose 0.03% to 13,083.00. Futures on the S&P 500 (SPY) fell 0.05% to 1,404.40 and Nasdaq (^IXIC) futures fell 0.03% to 2,770.25.

Today, auto sales figures are expected to show that Americans bought 1,255,392 vehicles in August, 17.2% gain over July. Ford (F) and General Motors (GM) are expected to show gains of 10% and 4%, respectively, but foreign automakers such as Honda and Volkswagen probably made bigger gains in the US market.

Shares of IBM (IBM) rose 1% before the opening bell today after Barclays raised its rating on the computer services provider to overweight from equalweight.

(See also: SEC Says Retail Investors Are Clueless About Stocks.)

Twitter: @vincent_trivett
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