* Dollar firms on short covering
* Chinese paper confirms bank reserve hike
* Fed minutes due at 2 p.m. EDT
* Futures off: Dow 36 pts, S&P 4.9 pts, Nasdaq 5.75 pts
* For up-to-the-minute market news see []
By Chuck Mikolajczak
NEW YORK, Oct 12 (Reuters) - U.S. stock index futures fell
on Tuesday as the dollar firmed and an official Chinese
newspaper confirmed the nation's central bank increased its
required reserve ratio for six banks.
Six banks had been hit with a 50 basis point increase in
reserve requirements, the fourth hike this year, due to
excessive lending, the China Securities Journal reported,
confirming a Reuters story on Monday For details, see
[] and []
The dollar rose against the euro and a basket of currencies
on a short-covering bounce ahead of the release of minutes from
the U.S. Federal Reserve's Open Market Committee meeting from
Sept. 21. The dollar index <.DXY> rose 0.3 percent.
"The dollar has really been the key driver in just about
all asset classes, including the market. It's all a function of
what our expectations are for quantitative easing come
November," said Arthur chief market analyst at Jefferies & Co
in Boston.
The prospect of quantitative easing has created an inverse
correlation between the dollar and equities as investors use
the greenback as a trigger point to move into or out of stocks.
[]
"The biggest driver for the market today before we get the
Fed minutes and get into the meat of the earnings season is the
pace of the dollar, and that firming up has got us a bit of a
selloff," Hogan added.
S&P 500 futures <SPc1> lost 4.9 points and were below fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures <DJc1> fell 36
points, and Nasdaq 100 futures <NDc1> shed 5.75 points.
The Fed, which will release the minutes at 2 p.m. EDT (1800
GMT), said after its Sept. 21 meeting it stood prepared to
provide more support for the economy but expressed concern
about low inflation.
"At this particular reading of the last minutes meeting,
we've had almost every Fed president speak since then. We
pretty much know what is on their minds," said Hogan.
As the earnings season picks up steam, results are expected
from Intel Corp <INTC.O>, railroad operator CSX Corp <CSX.N>
and industrial distributor Fastenal Co <FAST.O>.
European shares <> fell 0.3 percent in early trading,
tracking a decline in Tokyo and depressed by a drop in mining
stocks on the back of a retreat in the price of copper and
other metals. []
Asian shares traded lower as indexes consolidated after
recent gains amid caution ahead of the corporate earnings
season. []
U.S. stocks drifted in the lightest trading volume of the
year on Monday as few dared to place bets ahead of key company
results later this week.
(Editing by Jeffrey Benkoe)
