U.S. stock futures pared losses, erasing most of a 1.4 percent decline, as a bigger-than-expected increase in orders for durable goods offset concern yesterday’s rally went too far, too fast.
Stock futures were initially under some stiff pressure this morning. Premarket participants had looked to pare positions following the prior session's surge, mostly for fear that those gains could ultimately be surrendered by further near-term volatility. The decision by Moody's to downgrade Japan's debt by one notch to Aa3 also hung over early morning action. However, news that durable goods orders for July increased more than had been broadly anticipated stimulated some bidding. An extension of the gains being staged today in Europe has also helped improve sentiment ahead of the open. Still, stock futures haven't quite moved ahead of fair value. As a result, the cash market is still expected to start the session in the red, albeit to a lesser degree than what had been suggested an hour ago.