U.S. Stock-Index Futures Retreat on Japan Growth Slowdown, New York Fed

U.S. stock-index futures retreated as weaker-than-estimated growth in New York manufacturing and Japan’s economy added to concern the global recovery is slowing.

Futures on the Standard & Poor’s 500 Index expiring in September slipped 0.2 percent to 1,073.9 at 8:38 a.m. in New York. Dow Jones Industrial Average futures declined 0.2 percent to 10,251.

The Federal Reserve Bank of New York’s general economic index rose to 7.1 this month from 5.1 in July. Economists forecast the measure would rise to 8, according to the median estimate in a Bloomberg News survey. Readings greater than zero signal expansion in the so-called Empire State Index that covers New York, northern New Jersey and southern Connecticut.

About $1.9 trillion has been wiped from the value of global equities since the Fed said Aug. 10 that the pace of economic recovery will probably be “more modest” than forecast. On Aug. 11, the Bank of England cut its forecast for the U.K. economy, signaling that it may need more stimulus.

Earlier declines in futures today came as slower-than- forecast economic growth in Japan increased concern that the global recovery is faltering. Gross domestic product in Japan rose an annualized 0.4 percent in the second quarter, the country’s Cabinet Office said today, pushing the economy into third place behind the U.S. and China. The median estimate of 19 economists surveyed by Bloomberg News was growth of 2.3 percent.

About $33 billion flowed out of funds owning U.S. shares this year even as the economic recovery sent free cash flow for American companies excluding banks to 6.8 percent of their market value. That’s the highest level compared with corporate debt yields since 1960, Credit Suisse Group AG data show. About $185 billion was sent to bond funds through July 31, the most on record, according to the Investment Company Institute.