💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

US STOCKS-Wall St set for lower open on debt crisis worries

Published 11/22/2010, 09:04 AM
Updated 11/22/2010, 09:08 AM

* Tyson Foods posts better-than-expected profit

* Hewlett-Packard, Analog Devices results due later

* Futures off: Dow 26 pts, S&P 4.4 pts, Nasdaq 1.5 pts (Updates Tyson results, adds quote)

By Chuck Mikolajczak

NEW YORK, Nov 22 (Reuters) - U.S. stock index futures pointed to a lower open on Monday as enthusiasm over a resolution to help bail out Ireland dissipated and worries over contagion to other euro zone countries remained.

The European Union and International Monetary Fund tentatively agreed to a bailout package with Ireland, with loans up to 90 billion euros to resolve its banking and budget crisis.

Concerns that Ireland's debt crisis might spread to other euro zone countries has hung over U.S. stocks in recent weeks, and European shares fell 0.6 percent on Monday.

U.S.-listed shares of Bank of Ireland tumbled 18 percent to $2.19, while Allied Irish Banks Plc dropped 9.8 percent to $1.11 in premarket trade.

"The thing that killed Ireland was the jump in the yields made it impossible to finance their deficit. So the market is what forced them under," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.

"The natural fear (is) you look at the yields that they had to pay for their debt to GDP ratios, and you come to the conclusion that if things don't change here dramatically we could be in that same ratio category."

The new Basel III banking rules will leave the biggest U.S. banks short of between $100 billion and $150 billion in equity capital, with 90 per cent of the shortfall concentrated in the top six banks, the Financial Times reported, citing Barclays Capital research.

S&P 500 futures slipped 4.4 points and were slightly 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 dropped 26 points, and Nasdaq 100 futures shed 1.5 points.

Trading volume is expected to be tepid this week in light of the U.S. Thanksgiving Day holiday on Thursday.

No. 1 U.S. meat producer Tyson Foods Inc posted a higher-than-expected quarterly profit, helped by a big jump in gross margins, and the company said it was off to a strong start in its current quarter. Its shares gained 2.9 percent to $16.10 premarket.

Quarterly results are also due from Hewlett-Packard Co and Analog Devices Inc.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.