Trading in the U.S. index futures suggests that Wall Street stocks may open Tuesday's session notably lower, joining the global market rout. The reason is not any different, as China threw up additional evidence of a wobbly economy. Two separate surveys showed that China's factory activity contracted, with the official data pointing to the steepest contraction in 3 years. Along with the China concerns, the domestic markets may also stay apprehensive due to the release of two-labor market readings over the course of the next three days, which have ramification for the Fed rate.
At 6:15 am ET, the Dow futures are slumping 335 points, the S&P 500 futures are receding 42 points and the Nasdaq 100 futures are moving down 95.75 points.
U.S. stocks retreated on Monday, as risk aversion continued to hold its sway over the markets amid uncertain domestic rate outlook and Chinese growth concerns.
On the economic front, the nation's automakers are scheduled to release the monthly auto sales data for August. Economists expect total vehicle sales to come in at a seasonally adjusted annual rate of 17.3 million units compared to 17.6 million units in July.
Markit is due to release the final results of its U.S. manufacturing PMI for August at 9:45 am ET. The consensus estimate calls for a reading of 53 for the month, down from 53.8 in July but up from the mid-month reading of 52.9.
The Institute for Supply Management is scheduled to release its national manufacturing PMI for August at 10 am ET. Economists expect the index to edge up to 52.8 from 52.7 in July.
Also at 10 am ET, the Commerce Department is set to release its construction spending data for July. Economists expect construction-spending growth of 0.8 percent month-over-month. Boston Federal Reserve Bank President Eric Rosengren is due to speak on the economic outlook in New York at 1:10 pm ET.
In corporate news, General Electric (GE) announced that it has completed the previously announced sale of its U.S. fleet service business to Element Financial in a deal valued at about $5 billion.
Bob Evans (BOBE), H&R Block (HRB) and Shoe Carnival (SCVL) are the important companies due to release their quarterly results after the close of trading.
The Asian markets fell across the board, as Chinese growth worries intensified following the release of lackluster manufacturing activity data. The Japanese market fell the most, as the yen rallied on risk aversion. The Australian, Hong Kong and Taiwanese markets also retreated sharply. An unchanged stance from the Reserve Bank of Australia did little to improve sentiment.
Japan's Nikkei 225 index ended down 724.79 points or 3.84 percent at 18,166. Australia's All Ordinaries showed indecisiveness in early trading but languished firmly in negative territory for the rest of the session. The index ended down 105 points or 2.01 percent at 5,117. The market witnessed across the board sell-off, with the declines very steep.
China's Shanghai Composite Index ended at 3,167, down 39.36 points or 1.23 percent, and Hong Kong's Hang Seng Index closed 485.15 points or 2.24 percent lower at 21,185.
On the economic front, revised estimate released by Markit showed that the Chinese manufacturing sector contracted by the most in 6 years in August. A separate report also showed that the service sector expanded at the slowest pace in the current 13-month growth sequence. The manufacturing PMI eased to 47.3 in August, down from 47.8 in July, but up from the flash estimate of 47.1. The service sector PMI fell to 51.5 from 53.8 in July.
Official data released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed that the manufacturing PMI fell 0.3 points to 49.7, thus entering contraction territory. The service sector PMI eased to 52.6 from 52.8.
Following the conclusion of the Monetary Policy Board meeting, the Reserve Bank of Australia announced its decision to hold rates unchanged at a record low of 2 percent for the fourth straight meeting. The bank stated that it would assess economic and financial conditions over the period ahead to decide on the future course of action.
The Australian Bureau of Statistics reported that new building approvals rose 4.2 percent month-over-month in July, ahead of the 3 percent growth expected by economists. Annually, approvals were up by 13.4 percent.
European stocks are being sold off heavily, as Chinese concerns strangulate the markets. All the three major averages in the region are down over 2 percent each.
On the economic front, final estimates released by Markit showed that the eurozone manufacturing activity slowed in August. The manufacturing PMI edged down to 52.3 from 52.4 in July. The flash estimate had called for a reading of 52.4.
U.K. manufacturing activity slowed in August, according to a report released by Markit and the Chartered Institute of Procurement & Supply. The manufacturing PMI declined to 51.5 in August from 51.9 in July. Meanwhile, a Bank of England report showed that mortgage approvals increased more than expected in July.
Data released by the German Federal Statistics showed that the jobless rate remained unchanged at 4.7 percent in July. The number of unemployed people edged down during the month. The Federal Labor Agency reported that the unemployment rate for August was unchanged at 6.4 percent, in line with expectations. The number of unemployed people fell 7,000 in July, more than the 4,000 drop expected by economists.
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