By Ellis Mnyandu
NEW YORK (Reuters) - Stock futures fell on Thursday as drugmaker MERCK (MRK.NY)& Co Inc's
Shares of Merck, a Dow component, dropped more than 5 percent to $25 before the bell after the company gave 2009 financial outlook below Wall Street's estimates.
European central banks cut interest rates to stimulate business activity and help the continent as it sinks deeper into recession.
The European Central Bank, the Bank of England and Sweden all cut rates. The British central bank cut interest rates by a full percentage point to shore up a crumbling economy, but analysts said the move might not be enough.
"Central banks can cut 200 basis points, but the fact is that banks aren't lending," said Matt McCall, president of Penn Financial Group in Ridgewood, New Jersey. "Banks are hoarding cash. The issue is confidence."
S&P 500 futures slipped 5 and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures shed 59 points, and Nasdaq 100 futures dipped 3 points.
The UK cut took rates to 2.0 percent, their lowest level since 1951.
Investors are also bracing or another round of congressional hearings on the U.S. auto industry rescue, which have shares of General Motors
Major U.S. retailers are due to post their November sales.
Warehouse club operator Costco Wholesale Corp
Economic data includes weekly jobless claims due at 8:30 a.m. and October factory orders at 10 a.m.
U.S. stocks rose for a second day on Wednesday as investors flocked to shares of Coca-Cola
But even with the two-day run-up, U.S. stocks remain broadly in a range of the lows going back about 11 years ago, and the benchmark S&P 500 <.SPX> is down 40.7 percent so far this year.
(Editing by Kenneth Barry)
