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  1. US stocks: Futures slump after China market selloff resumes

US stocks: Futures slump after China market selloff resumes

U.S. stock index futures fell sharply on Monday on concerns about China's slowing growth in the wake of the biggest drop in Shanghai shares in eight years.

By: | Published: July 28, 2015 6:00 AM

U.S. stock index futures fell sharply on Monday on concerns about China’s slowing growth in the wake of the biggest drop in Shanghai shares in eight years.

* Chinese shares tumbled more than 8 percent as an unprecedented government rescue plan to prop up valuations abruptly ran out of steam, raising doubts about the viability of Beijing’s efforts to stave off a deeper crash.

* Commodity prices resumed their downward spiral with the broader Thomson Reuters CRB commodities index hitting its lowest in six years and oil prices hitting a four-month low.

* Chinese ADRs were set for a rough start with Alibaba , Baozun and Sohu.com off between 2 percent and 5 percent.

* The S&P 500 and Nasdaq posted their largest weekly drops since March on Friday as slowing global growth dragged commodity-related stocks lower.

* Earnings season continues with big oil, social media stocks and pharma companies scheduled to report this week.

* Second-quarter S&P 500 earnings have been mixed, with 74 percent of companies beating analysts’ profit expectations but just 52 percent surpassing revenue expectations, according to Thomson Reuters data.

* Adding to the concerns regarding lukewarm earnings, the S&P 500 is relatively expensive, trading at 16.9 times forward 12 months’ earnings, above the 10-year median of 14.7 times, according to StarMine data with only a handful of stocks fuelling recent highs.

* Investors are also keeping a sharp eye on economic data ahead of this week’s U.S. Federal Reserve’s two-day meeting, the last before September, which still looms as the first possibility for an interest rate increase.

* Data expected today includes numbers for non-defense capital goods orders, excluding aircraft at 8:30 a.m. ET (1230 GMT) and a closely watched proxy for business spending plans is expected to have risen 0.4 percent in June at 10:30 a.m. ET.

* Teva Pharmaceutical’s shares jumped 14.2 percent to $70.60 in premarket trading after it agreed to buy Allergan generic drugs business for $40.5 billion, giving up on its bid to buy Mylan. Allegran was up 10.3 percent at $340 while Mylan fell 11.8 percent to $58.08.

* Fiat Chrysler was down 2.2 percent at $14.81 after the U.S. auto safety watchdog, National Highway Traffic Safety Administration, announced a $105 million fine against the automaker over lapses in its safety recalls.

Futures snapshot at 7:22 a.m. ET:

* S&P 500 e-minis were down 11.75 points, or 0.57 percent, with 170,850 contracts traded.

* Nasdaq 100 e-minis were down 33 points, or 0.72 percent, on volume of 24,687 contracts.

* Dow e-minis were down 108 points, or 0.62 percent, with 21,770 contracts changing hands.

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