US stock futures fall as retail sales drop

US stock futures extended their declines today after the government reported August retail sales excluding those of vehicles …

US stock futures extended their declines today after the government reported August retail sales excluding those of vehicles fell sharply.

Weaker retail sales were expected after the chain stores reported disappointing results earlier this month, but the report was worse than economists predicted.

The US Commerce Department said retail sales fell 0.4 percent in August excluding vehicle sales, compared with a 0.7 per cent rise in July and economists' consensus forecast for a 0.1 per cent increase.

Investors have been on edge over whether tight credit, a housing slump and volatility on Wall Street have hurt the consumer, whose willingness to spend is critical to economic growth.

READ MORE

The feeble retail sales figure makes it more likely that the Federal Reserve will cut its benchmark federal funds rate on Tuesday.

Dow Jones industrial futures, already down before the retail sales report, slid 86, or 0.64 per cent, at 13,450. Standard & Poor's 500 index futures lost 10.50, or 0.70 per cent, to 1,487.50, and Nasdaq 100 index futures shed 17.25, or 0.85 per cent, to 2,007.25.

Merrill Lynch downgraded shares of Intel and American Express, it was reported, sending both stocks lower in premarket activity.

AP