Stock futures fall after Japanese economy latest to show signs of slowing growth

Stocks set to fall as Japanese growth slows

NEW YORK — Stock futures fell after Japan became the latest country to report slowing growth, adding to concerns about the pace of a global economic recovery.

Japan reported its economy grew just 0.1 percent in the second quarter, well below the 1.2 percent growth in the first quarter and short of expectations. The report follows signs last week that both the U.S. and Chinese economies are not growing as quickly as earlier in the year.

A report Monday showed manufacturing activity in New York rebounded slightly this month after declining sharply in July. Despite the modest gain, activity did not expand as much as had been forecast, indicating economic growth remains small.

The Federal Reserve Bank of New York’s Empire State Manufacturing Index rose to 7.1 in August from 5.1 in July. Economists polled by Thomson Reuters forecast the index would rise to 8. The index was as high as 19.6 just two months ago.

Investors will also get reports on housing starts, inflation at the consumer level, industrial production and weekly claims for unemployment benefits later this week. A big jump in unemployment claims last week added to stock losses.

The Dow Jones industrial average fell nearly 400 points over the past four trading days after the Federal Reserve took a more cautious tone about the pace of recovery and said it would start buying Treasury bonds to try and stimulate growth. Major retailers like J.C. Penney Co. also warned that profits the rest of the year would not be as big as previously estimated because shoppers are cutting back on spending.

Lowe’s Cos. said Monday its quarterly profit and revenue rose, though both measures fell short of forecasts. The home-improvement retailer also lowered its full-year revenue forecast.

Investors continued to snap up Treasurys Monday, driving interest rates lower. The drop came because of continued concerns that the global economy will slow and mostly strong corporate earnings reported in the second quarter will not be able to hold up.

Ahead of the opening bell, Dow Jones industrial average futures fell 13, or 0.1 percent, to 10,253. Standard & Poor’s 500 index futures fell 1.70, or 0.1 percent, to 1,074.40, while Nasdaq 100 index futures fell 2.00, or 0.1 percent, to 1,813.25.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.61 percent from 2.68 percent late Monday. Its yield is often used to help set interest rates on mortgages and consumer loans.

The yield on the 10-year note is near the level last hit in March 2009 when stocks fell to a 12-year low.

Overseas, Japan’s Nikkei stock average fell 0.6 percent. Britain’s FTSE 100 fell 0.3, Germany’s DAX index dropped 0.1 percent, and France’s CAC-40 fell 0.8 percent.