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Stock futures fall as debt stalemate continues

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By Associated Press

NEW YORK (AP) — U.S. stock futures fell Wednesday as lawmakers remain at odds over how to avoid a debt default. A weak report on long-lasting manufactured goods also weighed on stocks.

House Speaker John Boehner had planned to hold a vote on his debt-limit plan on Wednesday. But that was postponed after conservative lawmakers scoffed at the proposal and congressional budget officials said it would have cut spending less than advertised. The White House had also threatened to veto Boehner's plan. A deal still appears a long way off.

The stalemate has put financial markets on edge. If an agreement is not reached by Aug. 2, the U.S. may not have enough cash to pay all its bills and could default. That would have a devastating effect, analysts say. The U.S. would likely lose its triple-A credit rating, causing interest rates to rise. Borrowing costs would go up for already strapped states and municipalities. Stocks could also plunge.

Ahead of the opening bell, Dow Jones industrial average futures fell 26 points, or 0.2 percent, to 12,406. Standard & Poor's 500 index futures fell 6, or 0.4 percent, to 1,320. Nasdaq 100 futures index fell 15, or 0.6 percent, to 2,409.

The government said that orders for durable goods fell 2.1 percent in June because of a drop in orders for commercial aircraft, automobiles and heavy machinery. The manufacturing industry had been one of the strongest performers over the past two years. But supply disruptions from Japan and higher energy prices have hurt demand.

Earnings results were mixed. Amazon.com Inc. rose 5.7 percent in premarket trading, a day after the online retailer reported that its earnings and revenue were far higher than analysts were expecting.

Dow Chemical Co. edged up 2.5 percent ahead of the opening after its earnings rose 73 percent, in part, because of higher prices and better sales. The company said it expects growth in major markets like the U.S. and Europe, despite the "somewhat uneven and jagged pace" of economic recovery.

Delta Air Lines Inc. fell 0.5 percent. The airline's earnings were lower than analysts had anticipated because of higher jet fuel expenses and costs related to voluntary buyouts for 2,000 workers.

Bond prices fell modestly, pushing yields higher. The yield on the 10-year Treasury note rose to 2.96 percent from 2.95 percent late Tuesday.

Precious metals continued to climb as investors looked for relatively safer places to park money. Gold rose $7.10 an ounce to 1,623.90. Silver edged up about 40 cents to 41.10 an ounce. Gold has risen about 1 percent this week, while silver is up 3 percent.