STOCKS TO OPEN LOWER

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NEW YORK (CNNMoney) — U.S. stock futures point to a lower open on disappointment in the Federal Reserve’s limited action, and more signs of a global economic slowdown hitting both China and Europe.

The Dow Jones industrial average (INDU), SP 500 (SPX) and Nasdaq (COMP) futures were lower Thursday morning. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Investors have a number of new economic reports to chew on Thursday, as they continue to digest the news that the Fed is extending its “Operation Twist” program.

The Fed said Wednesday that it will extend Twist — its policy of swapping short-term Treasuries in its portfolio for bonds with a longer duration — until the end of the year, in an effort to jumpstart sluggish economic growth and hiring in the United States. The Fed said it stood ready to take additional action if needed.

But the move fell short of the full-blown injection of additional cash into the economy, through asset purchases known as quantitative easing that many investors have been calling for. U.S. stocks closed mixed Wednesday following the Fed’s announcement.

Overseas economic reports released Thursday show it’s not just the U.S. where the the economy is weaker than hoped.

The preliminary report for HSBC Manufacturing Purchasing Managers’ Index showed China fell to a seven-month low — a sign that factories there are being hit by sluggish demand, both domestically and overseas.

Meanwhile, Europe’s PMI index for June remained at the near three-year low, as manufacturing output in Germany — the most important European economy — fell at the fastest rate in three years. That’s the second straight month of decline there.

The latest economic data comes as eurozone finance ministers are gathering in Luxembourg for a two-day summit.

The continent’s leaders are facing pressure to announce new measures to combat their sovereign debt crisis, which remains of grave concern even after news that Greek politicians formed a coalition government led by a pro-bailout party.

Spain’s bond auction of 2-, 3-, and 5-year bonds Thursday morning resulted in 2-year yields doubling from the prior auction, and sent yields for the 5- and 7-year notes also markedly higher. But the yield on the benchmark 10-year Spanish bond, which pushed past 7% earlier this week, fell to 6.5%. That’s down 0.2 percentage points from Wednesday’s level, indicating fears that the eurozone’s fourth largest economy will need a bailout may be lessening.

CNNMoney’s own Fear and Greed index shows investors less fearful, although still in fear territory. But the index had been in extreme fear territory until last week.

Domestic economic reports on tap for Thursday in the United States include the latest look at initial jobless claims and existing home sales.

World markets: European stocks fell in morning trading. Britain’s FTSE 100 (UKX) slid 0.5%, while the DAX (DAX) in Germany shed 0.4% and France’s CAC 40 (CAC40) was off 0.3%.

Asian markets closed mix after HSBC’s flash manufacturing report and in reaction to the Fed meeting. The Shanghai Composite (SHCOMP) lost 1.4% while the Hang Seng (HSI) in Hong Kong was down 1.3% at the close. But Japan’s Nikkei (N225) closed 0.8% higher.

Economy: Initial jobless claims for the week ended June 16 are expected to total 380,000, according to a survey of analysts by Briefing.com — down from 386,000 in the week prior.

Existing home sales for May are expected to come in at an annualized rate of 4.56 million. The Conference Board’s Leading Economic Indicators Index for May is expected to remain unchanged, after decreasing by 0.1% in April.

Companies: Drugstore chain Rite Aid (RAD, Fortune 500) and food producer ConAgra (CAG, Fortune 500) are scheduled to release their quarterly results before the bell.

Rite Aid is expected to report a loss of four cents a share on $6.43 billion in revenue, according to a survey of analysts by Thomson Reuters. ConAgra is expected to post earnings of 50 cents a share on $3.38 billion in revenue.

Shares of Bed Bath Beyond (BBBY, Fortune 500) sank more than 10% in after-hours trading Wednesday, after the retailer offered disappointing guidance for the current quarter.

Currencies and commodities: The dollar rose against the euro and Japanese yen, but lost ground versus the British pound.

Oil for July delivery fell 83 cents to $80.62 a barrel.

Gold futures for August delivery dropped $15.80 to $1,600.00 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury was little changed, leave the yield near the 1.66% level reached late Wednesday.  To top of page

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