Eurozone private sector readings seem to have spoiled the party for Wall Street on Tuesday, quelling the initial optimism generated by hopes of additional stimulus and policy support. That said, sentiment over the course of the session may be dictated by the results of the domestic service sector survey done by the Institute for Supply Management and the developments from the conference call scheduled among the G7 finance ministers and central bank governors to discuss the eurozone crisis.
As of 6:30 am ET, the Dow futures are slipping 4 points and the S&P 500 futures are down 2 points, while the Nasdaq 100 futures are receding 4.25 points.
U.S. stocks went about a tentative run on Monday, remaining mostly below the unchanged line before closing mixed. The mixed performance came against the backdrop of the simmering eurozone debt crisis and a report showing an unexpected drop in factory orders, which accentuated the fragility of the domestic economy.
On the economic front, the Institute for Supply Management is scheduled to release the results of its non-manufacturing survey at 10 am ET. The non-manufacturing index is likely to show a reading of 53.5 for May, flat with the previous month.
St. Louis Federal Reserve President James Bullard is scheduled to speak on the housing market in St. Louis at 2:15 pm ET. Dallas Federal Reserve president Richard Fisher will speak on "The Limits of the Powers of Central Banks" in Scotland at 7 pm ET. Additionally, Chicago Federal Reserve Bank Charles Evans is due to speak to the NYU Money Marketeers, in New York at 7:30 pm ET.
In corporate news, Lam Research (LRCX) announced that it has completed its merger with Novellus (NVLS). Lam Research and former Novellus shareholders now own about 57 percent and 43 percent, respectively of the combined company.
Nordson (NDSN) announced a definitive agreement to buy Xaloy Superior, a maker of components for injection and extrusion machinery in the plastic industry, for $200 million. The company expects the deal to close in the third quarter.
Honeywell (HON) said it has acquired privately held INNCOM, a maker of energy management software solutions maker. The company did not disclose the terms of the transaction.
Dollar General (DG) announced an underwritten secondary public offering of 25 million shares. Separately, the company reported better than expected first quarter results. The company maintained its 2012 sales guidance, while upwardly revising its earnings guidance.
Shuffle Master (SHFL) reported in line earnings for its second quarter, while its revenues exceeded estimates.
Starbucks (SBUX) said it has agreed to buy San-Francisco-based Bay Bread as well as to hire French baker Pascal Rigo.
Asian stocks recovered from oversold levels, as firmer commodities gave a boost to the equity markets in the region. Additionally, hopes of stimulus announcements from some of the global central banks due to announce monetary policy decisions this week are giving some impetus to the markets.
Australian central bank's board announced a 25 basis point reduction in its key official cash rate, given the flailing global and domestic growth outlook. The Reserve Bank indicated that the inflation outlook provided the leeway to ease monetary policy further.
Japan's Nikkei 225 average added 86.37 points or 1.04 percent before closing at 8,382, snapping a 4-session slide. The modest pullback by the yen provided support to export stocks, while Fast Retailing slipped on weak sales results at its Uniqlo causal clothing retail chain.
Australia's All Ordinaries climbed 59 points or 1.46 percent before closing at 4,092, with energy stocks lending solid support. Material stocks also rallied. The market benefited from firmer commodity prices and the central bank action. Meanwhile, Hong Kong's Hang Seng Index closed at 18,259, down 73.44 points or 0.40 percent.
The major European markets are mostly higher, with the exception of German stocks. The U.K. market remained closed for a second day due to a public holiday. The gains came despite the release of lackluster private sector activity data from the region.
Additionally, separate reports showed that eurozone retail sales as well as German factory goods orders declined by more than expected in April.
The dollar is mostly higher against its counterparts, while oil has given back its Asian session's gains following the release of disappointing economic data from the eurozone.
by RTT Staff Writer
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