LONDON (ShareCast) - (ShareCast News) - US stock futures pointed south on Wednesday, with Wall Street poised for further losses after China allowed its currency to plunge for the second consecutive day.
The Dow Jones Industrial Average is expected to open down approximately 144 points, while the S&P 500 and the Nasdaq are set to begin the session 17 and 36 points lower respectively.

Yuan tumbles

Asian stocks fell as China decided to devalue its currency for a second day in a row.

The Shanghai Composite Index lost 1.58% after China's central bank devalued its currency for the second day, adding to concerns about the slowdown in the world's second-largest economy.

It cut its national currency, the yuan, by another 1.6%, after Tuesday's 1.9% devaluation. China's commerce ministry said the lower rate would help struggling exporters.

"The yuan situation only got more complicated with reports suggesting that the Chinese government, after devaluing its currency, was now propping it up by ordering its state banks to sell the dollar," said Spreadex's financial analyst Connor Campbell.

"If true it is an utterly baffling move, one that reflects a worryingly lack of clarity and/or sense in the decision making process at the top of the Chinese period, something that in itself that could have disastrous ramifications down the road."

The dollar jumped 0.91% against the yuan and was broadly flat against the pound, but suffered sharp losses against the yen and the euro, losing 0.67% and 0.95% against the two currencies.

China puts US stocks under pressure

While the weaker yuan boosts Chinese exporters, it has serious ramifications for companies exporting to China and put carmakers, luxury goods firms and technology groups under pressure.

Having closed down 5.2% on Tuesday, Apple was down 1.56% in pre-market trading, while fellow tech giants Micron Technology and Qualcomm fell 1.34% and 1.01% respectively ahead of the opening bell.

Among the companies reporting ahead of the open, Alibaba fell 5.25% and was on track to open at a record low after the e-commerce giant saw its first quarter revenue fall short of estimates, even though earnings beat analysts' forecast.

IP group Cisco Systems and media giant News Corp will report after the close.

Wednesday data

The economic calendar is relatively quiet on Wednesday, with the JOLTS job openings data the highlight of the session at 1500 BST.

Meanwhile, the Mortgage Bankers Association (MBA) said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, climbed 0.1% in the week ended 7 August.

Elsewhere, European stocks fell sharply, with autos and basic resources pacing the decline as worries about a slowdown in China intensified.

Oil prices staged a solid rebound, with both West Texas Intermediate and Brent climbing 1.32% to $43.66 and $49.84 a barrel respectively, while gold futures rose 0.88% to $1,117.50.

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