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Pre-Market Primer: Stocks Dip on Global Manufacturing Declines


The latest PMI manufacturing readings for China and Germany are showing danger signs while American factories are improving.

MINYANVILLE ORIGINAL The Fed announced that Operation Twist will continue until the end of the year, adding $267 billion to the program, and stock futures are positive despite disappointing employment and manufacturing data.

Initial claims for unemployment insurance last week fell by 2,000 from the previous week's 389,000, missing economists' estimates.

Today saw a lot of data on global manufacturing. The eurozone's flash manufacturing PMI index contracted slightly to 44.8. German PMI also shrank to 44.7. Chinese factory activity also slumped this month, and the PMI reading came in at 48.1. A reading of US manufacturing PMI that will come out later this morning will show that the sector improved to 53.8. A reading above 50 signals improving business conditions.

The disappointing data resulted in stock futures erasing earlier gains. Futures on the Dow (^DJI) dropped 0.05% to 12,757.00 while S&P 500 (SPY) futures fell 0.07% to 1,349.70 and Nasdaq (^IXIC) futures slid 0.13% to 2,613.75.

Yesterday, the Fed cut its estimates for economic growth in the US to a 1.9% - 2.4% range from an earlier forecast of 2.4% - 2.9%.

The newly formed New Democracy/PASOK/Democratic left coalition government in Greece has asked international creditors for another two years to implement fiscal reforms mandated by the bailout that the country received earlier this year.

At 10:00 a.m., the National Association of Realtors will show that previously-owned home sales fell 1.1% to an annual rate of 4.57 million in May, according to economists polled by Bloomberg.

Onyx Pharmaceuticals (ONXX) surged 36.7% this morning after the Food and Drug Administration approved its blood cancer drug.

Phillip Morris (PM) declined in pre-market after the tobacco company cut its earnings forecast for the current quarter.

Samsung's (SSNLF) flagship Galaxy S III, widely regarded as the best Google (GOOG) Android phone, is seeing huge demand in its US debut on multiple carriers including AT&T (T), Verizon (VZ), and Sprint (S). But Apple (AAPL) supplier Foxconn says that the latest iPhone, which is still unannounced, will blow the Galaxy away. Foxconn CEO Terry Gou told Taiwanese media that he has a lifetime goal of defeating Samsung, calling the Korean conglomerate "a company with a track record of snitching on its competitors."

Twitter: @vincent_trivett
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