Futures Flat on News U.S. Trade Deficit Widens to $40.3B in April

The trade deficit increased to $40.3 billion in April from a downwardly-revised $37.1 billion in March. Exports for the month climbed 1.2%, while imports jumped 2.4%.

UPDATE: 2:08PM ET – The markets are coming under intense selling pressure as economically-sensitive sectors like energy, industrials and financials sell off. The Dow is down 125 points, or 0.82%, while the broader S&P 500 is off 0.8%.

The markets came under heavy selling pressure in afternoon trading, with cyclical stocks leading the way lower.

Today’s Markets

As of 1:48 p.m. ET, the Dow Jones Industrial Average fell 121 points, or 0.79%, to 15131, the S&P 500 dipped 12.9 point, or 0.79%, to 1628 and the Nasdaq Composite skidded 25.9 points, or 0.75%, to 3439.

Earlier

The U.S. trade deficit increased to $40.3 billion in April from a downwardly-revised $37.1 billion in March. Economists were expecting the deficit to increase to $41 billion. Exports for the month climbed 1.2%, while imports jumped 2.4%.

U.S. stock-index futures teetered in a tight range on Tuesday as traders waited for the latest round of American trade data.

Today’s Markets

As of 8:07 a.m. ET, Dow Jones Industrial Average futures climbed 2 points to 15219, S&P 500 futures rose 1 point to 1637 and Nasdaq 100 futures advanced 4.3 points to 2990.

Wall Street kicked off the month on a high note Monday, with the markets rallying on hopes a patch of weak manufacturing data will keep the Federal Reserve from trimming down its bond-buying program for the moment.

Traders will got a look at the status of American trade at 8:30 a.m. ET. Economists expect the trade deficit to have swelled to $41 billion in April from $38.8 billion the month before. While the report is a lagging indicator, the data figures directly into second-quarter gross domestic product. The bigger the deficit, the more it detracts from GDP, thus it is a sign that GDP will be slowing in growth.

Tomorrow, traders will get the first glimpse at how many jobs the private sector added in May from payroll processor ADP. Friday, the Labor Department releases the latest monthly jobs report. Economists widely expect that the economy added on 170,000 jobs for the month, which will leave the unemployment rate steady at 7.5%.

In corporate news, Salesforce.com (CRM) said it is buying ExactTarget (ET) in a deal valued at some $2.5 billion. General Motors (GM) is set to replace H.J. Heinz (HNZ) on the S&P 500 and S&P 100 indices.

American International Group (AIG) will take Baker Hughes’ (BHI) place on the S&P 100 index as well, and the oilfield servicing company will hold its spot on the S&P 500.

Oil prices were down. The benchmark U.S. crude oil contract fell 54 cents, or 0.58%, to $92.92 a barrel. Wholesale New York Harbor gasoline rose 0.29% to $2.794 a gallon. Gold again slumped to $14.20, or 1%, to $1,398 a troy ounce.

Foreign Markets

The Euro Stoxx 50 climbed 0.48% to 2761, the English FTSE 100 gained 0.66% to 6568 and the German DAX edged up 0.33% to 8313.

In Asia, the Japanese Nikkei 225 rocketed up 2.1% to 13534 and the Chinese Hang Seng crept higher to 0.01% to 22286.