Wall Street set for mild opening as yield figures worry investors

Wall Street's main indexes were set for a flat open on Wednesday, as global growth fears and a prolonged inverted U.S. yield curve prompted investors to shun riskier assets.

Futures pared some losses after a Commerce Department report showed that U.S. trade deficit dropped more than expected in January, likely as Chinese purchases of soybeans spurred a rebound in exports after three straight monthly declines. The benchmark 10-year Treasury note yields fell to their lowest levels since December 2017 on Wednesday, a day after showing signs of stabilization that boosted financials and helped lift the three main indexes.

Wall Street has been hit by fears of slowing global economic growth since last week following dour factory data from the United States, Europe and Japan, as well as weak consumer confidence numbers for March this week. Adding to the worries over global growth, Chinese data on Wednesday showed industrial profits shrank the most since late-2011 in the first two months of the year.

"There has been recent jitters and choppiness in the market created by a buffet of concerns, it's not just one thing, so this morning investors are taking a pause," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey. "The yield curve being inverted is another data-point that investors are looking at, that's why our relationship with China and global growth becomes a concern."

The European Central Bank said on Wednesday it could further delay a planned increase in interest rates as it faces rising threats to growth, a week after the Federal Reserve abandoned any rate hikes this year. At 8:37 a.m. ET, Dow e-minis were down 9 points, or 0.04 per cent. S&P 500 e-minis were down 0.5 points, or 0.02 per cent and Nasdaq 100 e-minis were up 6.25 points, or 0.08 per cent.

Markets also awaited new developments on trade talks between the United States and China with a new round of high-level negotiations scheduled to start on Thursday. Among stocks trading premarket, Boeing Co rose 0.3 per cent ahead of a scheduled briefing on its 737 MAX airliners for pilots and airline representatives in Washington later in the day.

Centene Corp's shares slipped 9.3 per cent after the health insurer said it would buy smaller rival WellCare Health Plans Inc for $15.27 billion. Shares of WellCare jumped 11.6 per cent. Southwest Airlines Co dipped 0.8 per cent after the company cut its financial outlook in the wake of the recent groundings of Boeing 737 MAX planes.

Lennar Corp rose 2.3 per cent as the homebuilder said it expected improving housing market even after missing Wall Street estimates for the first quarter.