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U.S. futures fall amid E.Z. concerns; Dow Jones down 0.36%

Published 09/24/2012, 07:59 AM
Updated 09/24/2012, 08:00 AM
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Investing.com - U.S. stock futures pointed to a lower open on Monday, as euro zone debt concerns and uncertainty over whether Spain is about to ask for a sovereign bailout weighed on market sentiment.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.36% fall, S&P 500 futures signaled a 0.33% decline, while the Nasdaq 100 futures indicated a 0.27% loss.

Concerns over the worsening of the debt crisis in the euro zone resurfaced after a report showed that Germany’s Ifo business confidence index deteriorated to the lowest level since March 2010 this month.

On Thursday, Madrid is to present its draft budget for next year and announce structural reforms, while the results of bank stress tests are due on Friday. In addition, ratings agency Moody’s is expected to complete a ratings review on Spain later this week.

Over the weekend, Spain’s economy minister said the country would not rush to seek external financial aid, as pressure mounted on Spain to seek a bailout.

Transport stocks were expected to be active, a week after two large shipping companies, FedEx and Norfolk Southern, warned about the impact of the weakening world economy on their results.

Financials were also likely to move, following sharp losses in European lenders. In pre-market trade, shares in Citigroup tumbled 1.40% and Bank of America lost 1.10%.

In addition, energy and mining stocks were expected to move lower on the back of sliding commodity prices. Oil and gas giant Chevron retreated 0.42% in earlier trading, while U.S. Steel plunged 2.86% after the stock was cut to neutral from buy at Citigroup.

Elsewhere, General Electric dropped 0.40% pre-market, as the company is reportedly preparing to buy more mining equipment and services companies as it creates a new unit. The company expects the new division to reach USD5 billion in sales "within a few years".

On the upside, construction company Lennar rallied 3.97% in earlier trading, after the company reported steep rises in its third-quarter earnings and revenue, while orders rose 44%.

Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 tumbled 0.99%, France’s CAC 40 plummeted 1.08%, Germany's DAX dropped 0.70%, while Britain's FTSE 100 retreated 0.56%.

During the Asian trading session, Hong Kong's Hang Seng Index fell 0.19%, while Japan’s Nikkei 225 Index slumped 0.45%.

Meanwhile, concerns over Greece persisted as Athens prepared to present a package of spending cuts demand by international lenders to euro zone officials at the end of this week, amid fears that the country’s budget shortfall could be larger than expected.


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