Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Randgold Resources Ltd. (ADR) (GOLD), Micron Technology, Inc. (MU): Dow May Slide as Investors Face Fed Taper

LONDON — Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average may open down by 0.6% this morning, while the S&P 500 may open 0.77% lower. Both markets closed down by more than 1% last night following yesterday’s announcement by Federal Reserve Chairman Ben Bernanke that the central bank’s asset-purchase program could start to be phased out later this year.

Randgold Resources Ltd. (ADR) (NASDAQ:GOLD)

European markets slid sharply lower this morning as investors reacted to last night’s news and started to reduce their exposure to risk assets. Sentiment was also depressed after new data showed that Chinese manufacturing activity is continuing to slow. At 7:10 a.m. EDT, the FTSE 100 was down 2.3%, while the DAX and the CAC 40 were down 2.4%. In London, the biggest fallers were gold miners Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) and Polymetal International, which were down by 5.9% and 6.6%, respectively, as the price of gold hovered around $1,300 per ounce.

Despite U.S. investors’ likely focus on the consequences of the end of the Fed’s asset purchase program, today’s economic reports could also be significant. At 8:30 a.m. EDT, the latest weekly jobless-claims figures are due, with analysts expecting 340,000 new claims last week, up slightly from 334,000 the previous week. As unemployment is one of the key economic indicators being used by the Fed to justify its taper schedule, a surprise result here could affect the markets. Next up, at 9 a.m. EDT, June’s Markit flash PMI is due, while at 10 a.m. EDT May’s existing-home sales report is expected to show that 5 million new sales were agreed last month, up from 4.97 million in April.

Companies whose stock may be actively traded when markets open include Micron Technology, Inc. (NASDAQ:MU), which reported a 5% rise in revenue and a return to profit after markets closed last night. Two other companies that reported after the close last night are Jabil Circuit, Inc. (NYSE:JBL), which fell by 3.8% in after-hours trading after reporting a 12% fall in third-quarter earnings per share, and Red Hat, Inc. (NYSE:RHT), which beat earnings expectations thanks to a 16% rise in third-quarter subscription revenue and rose by 3.4% in after-hours trading. Among the companies due to report earnings before the open today are Rite Aid Corporation (NYSE:RAD) and The Kroger Co. (NYSE:KR), while Oracle Corporation (NASDAQ:ORCL) will update investors later today.

The article Dow May Slide as Investors Face Fed Taper originally appeared on and is written by Roland Head.

Roland Head has no position in any stocks mentioned. The Motley Fool owns shares of Oracle.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.