After the Dow Jones Industrial Average suffered its third worst fall this year yesterday, bargain hunters are set to walk the market today.
The Dow dropped 470 points to 16,058 yesterday, but there were equally heavy percentage declines for the Nasdaq Composite and the S&P 500.
Traders said redemptions from mutual funds by investors were adding to the pressure and fueling the downturn.
There seems little chance, at least at the outset, of those sorts of losses being entirely recouped, but spread betting quotes indicate the Dow will claw back one-third of the decline, opening at around 16,220, up 162 points. The broader-based S&P 500 is tipped to start at around 1,932, up 25 points on last night's close.
Asian markets provided some relief late in the day on Wednesday with Tokyo rising and China and Hong Kong both picking up a little after weak openings, though both markets remained in the red overall.
China has been the cause of the recent sell-off and sparked more red ink yesterday after another soft set of manufacturing numbers, so a bit of equilibrium in Shanghai and Hong Kong is likely to be welcomed by the bulls stateside.
Corporate news flow is expected to be on the light side, but there are some significant economic items out today, such as non-farm productivity and unit labour costs.
"Following two negative quarters, productivity is expected to have risen sharply in the second quarter, by 2.8%. This could indicate future wage growth and therefore future inflationary pressures," suggests Craig Erlam at foreign exchange firm OANDA.
"Unit labour costs are expected to have fallen by 0.9% in the same quarter which wouldn’t come as a surprise following the disappointing employment cost index figure we had for the same period. Marginally higher employment costs, up 0.2% in the second quarter, and higher productivity would explain the expected unit labour cost saving by employers as they seek to offset the negative impact of the stronger dollar. The question that the Fed will face is whether they expect it to persist as this will weigh on the inflation outlook, with companies seeking to keep prices low."
The non-farm employment change number from payrolls processing firm ADP is also due out, and is viewed by some analysts as a bit of a pointer to the official non-farm payrolls data out later this week.
Lastly, with crude oil futures back in decline after a little three day revival either side of the weekend, the crude oil inventories release could be keenly watched.
Ahead of the market open, oil support services giant Transocean (NYSE:RIG) is one of the few blue-chips showing up red on traders' screens.
The Ford Motor Company (NYSE:F), up 1.8% in heavy trade, tops the list of pre-market risers.