Stock futures lower ahead of durables orders, home sales

NEW YORK (Reuters) - Stock index futures fell on Wednesday as weakness in equities markets overseas kept traders cautious ahead of upcoming U.S. data on durable goods orders and home sales.

New home sales for July will be released at 10 a.m., and economists in a Reuters survey expect no change from the 330,000 unit annual rate in June. A revival of the housing market is considered crucial for an economic recovery, and on Tuesday, weak existing home sales data sparked a sell-off that sent stocks to seven-week lows.

"Home sales are driving the market right now, and yesterday's read doesn't bode well for today's data," said Cort Gwon, director of trading strategies at FBN Securities in New York. "A lot of weakness is discounted, but there's still downside potential if we miss (expectations)."

Data on July durable goods orders, also due at 10 a.m., are expected to show a rise of 2.8 percent after a 1.2 percent drop in June.

Standard & Poor's late on Tuesday cut its credit rating on Ireland and assigned it a negative outlook, expecting the country to face substantially higher costs to support its ailing financial institutions.

Japanese stocks hit a 16-month closing low as disappointment spread over the lack of policy action by Japan to rein in the strong yen. Japan's finance minister sharpened his rhetoric on the yen's steep gains after the Nikkei newspaper reported Japan may consider selling the yen in solo intervention if speculators drive it up.

S&P 500 futures fell 2.5 points and were 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 lost 18 points, and Nasdaq 100 futures slid 5.75 points.

American International Group Inc is expected to decide by early next week whether to enter formal negotiations with strategic investors for its Asian life insurance business, AIA, sources familiar with the process told Reuters on Wednesday.

JDS Uniphase Corp is the sole S&P 500 company scheduled to report quarterly results on Wednesday, and the telecommunications equipment maker is expected to swing to a fourth-quarter profit.

Luxury homebuilder Toll Brothers Inc swung to a third-quarter profit and said it expects gross margins before interest and write-downs to improve in its fourth-quarter. Shares of Toll closed Tuesday at $16.19.

U.S.-listed shares of Potash Corp dipped 0,4 percent in premarket trading to $148.50 after mining giant BHP Billiton tried to dampen expectations that it would substantially raise its hostile $39 billion bid for the company.

The Dow and S&P 500 notched their fourth straight day of losses on Tuesday as the unexpectedly large drop in home sales ratcheted up concerns that the economic recovery is even weaker than feared.

(Editing by Padraic Cassidy)

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