Wall St opens down on weak German data

US STOCKS PRE-OPEN: Wall St to resume slide as German economy stalls

US stocks were set to open lower on Tuesday after three days of gains as data showed sluggish German growth hobbled the euro zone,rekindling fears over a stagnant global economy.

In the latest U.S. data,July housing starts fell,reflecting a sector continuing to bounce along the bottom.

But a better-than-forecast industrial output report could give some support to equities and help shave some losses.

Germany recorded its weakest quarterly growth rate since 2009,fueling concerns about an European economy already weakened by a fiscal crisis. German stocks fell 2.1 percent.

German Chancellor Angela Merkel and French President Nicolas Sarkozy were meeting later Tuesday to discuss measures to contain Europe’s fiscal crisis. A joint news conference was set for noon EDT (1600 GMT).

Investors are relying on a strong Germany to lead Europe out of the financial mess it’s in,said Nicholas Colas,chief market strategist at the ConvergEx Group in New York.

The data puts more weight on the double-dip camp,he said,referring to traders who expect the global economy to slip again into recession.

Meanwhile,Fitch affirmed United States ‘AAA’ rating,with a stable outlook.

S&P 500 futures fell 12.4 points and were below fair value,a formula that evaluates pricing by taking into account interest rates,dividends and time to expiration of the contract. Dow Jones industrial average futures lost 80 points,and Nasdaq 100 futures dropped 22.75 points.

A market decline would follow three days of sharp gains and last week’s wild market swings and heavy volume.

A pullback along the lines of the volatility we’ve seen in the last days shouldn’t be unexpected,Colas said. We are in a very volatile period.

Wal-Mart Stores Inc’s profit topped estimates even as U.S. same-store sales fell for a ninth straight quarter. Its shares jumped 3.6 percent to $51.81 in premarket trading.

Home Depot Inc rose 2.4 percent to $32.21 after its profit came in better than expected,and the home improvement retailer operator raised its earnings forecast for the year.