Sentiment remains extremely negative after last week's volatile ride, as there seems to be uncertainty concerning the roadmap for the resolution of the eurozone debt crisis. Although the EU meeting scheduled to be held on Thursday and Friday this week holds some promise, conventional wisdom suggests that the problem at hand is far too large to be resolved with a meeting or a few measures. Meanwhile, as expected, Spain has formally applied for a bailout for its banking system. Traders may also react to the U.S. new home sales data to be released after the markets open.
As of 6:15 am ET, the Dow futures are down 92 points and the S&P 500 futures are receding 10.80 points, while the Nasdaq 100 futures are slipping 17.75 points.
U.S. stocks closed the week ended June 22nd on a mixed note, with the Dow Industrials and the S&P 500 Index closing lower, while the tech-heavy Nasdaq Composite Index ended higher. Somber domestic economic data and disappointment over the Fed decision worked in the minds of traders, sapping their risk appetite and sending stocks lower.
With the Fed decision now behind us, the focus shifts back to economic data in the unfolding week. The Commerce Department's new homes sales report for May, the National Association of Realtors' pending home sales index for May, the Conference Board's consumer confidence index for June and the revised consumer sentiment index compiled by the Reuters and the University of Michigan are among the market moving reports of the week.
Traders may also focus on the weekly jobless claims data, the results of the ISM-Chicago's manufacturing survey for June, the Commerce Department's personal income and spending report for May and the durable goods orders report for May. A few regional manufacturing indexes, the S&P Case-Shiller house price index for April, the final first quarter GDP report and the Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.
In corporate news, Lockheed Martin (LMT) said it has reached a tentative agreement with the representatives of the International Association of Machinists and Aerospace Workers, District 776 to end an ongoing strike. The company did not disclose the terms of the tentative agreement.
Teva (TEVA) announced that a U.S. district court has found in favor of Teva (TEVA) in its patent infringement lawsuit against Momenta Pharma (MNTA)/Sandoz and Mylan (MYL)/Natco Pharma regarding its relapsing MS product COPAXONE.
Shire (SHPGY) said the FDA approved a generic version of its hyperactivity drug Adderall XR meant to treat attention deficit hyperactivity disorder.
Kirby Corp. (KEX) lowered its second quarter and full year guidance below the consensus estimates, citing deterioration in the manufacturing area and softness in the oil field related engine and transmission sales and service and parts sales at its United Holdings unit.
Jacobs Engineering (JEC) announced its intention to buy 100 percent of the shares of Team Maroc through its Casablanca-based joint venture Jacobs Engineering SA. The companies did not reveal the terms of the deal.
Most Asian markets retreated, as traders focused on the eurozone amid a lack of any major catalysts.
Japan's Nikkei 225 average closed down 63.73 points or 0.72 percent at 8,735, with sentiment hit by a stalling in the rally of the dollar against the yen. Most stocks, with the exception of defensive stocks, came under selling pressure. Export-dependent and resource stocks were the worst hit, while pharma, telecom and construction stocks got some reprieve.
Australia's All Ordinaries declined sharply in the morning only to pare back some of its losses over the rest of the session. The index closed down 21.80 points or 0.53 percent at 4,072, but off its lows of 4,041.
Material stocks came under severe selling pressure, with BHP Billiton slipping over 1 percent, while peer Rio Tinto posted a more modest loss. Newcrest Mining also pulled back sharply. Miners reacted negatively a UBS (UBS) report warned of shrinking net incomes in the immediate years for BHP Billiton and Rio Tinto due to lower commodity prices and as the mining and carbon tax takes effect in less than a week.
Despite staging a mid-session recovery, Hong Kong's Hang Seng Index closed down 97.68 points or 0.51 percent at 18,898. China's Shanghai Composite Index retreated 1.63 percent before closing at 2,224.
The major European markets are retreating sharply amid the uncertain outlook for the resolution of the debt crisis. Spain made a formal request for a bailout for its banking system, although no further details about it were available.
Meanwhile, Fitch became the last rating agency to downgrade Cyprus' debt rating to 'BB+', signaling junk status, from 'BBB-', while maintaining a negative outlook.
Crude oil as well risk currencies are moving to the downside.
by RTT Staff Writer
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