After seeing considerable volatility last week, stocks are likely to move to the downside in early trading on Monday. The major index futures are currently pointing to a sharply lower open, with the Dow futures down by 98 points.
The downward momentum for the markets comes as traders keep a close eye on the latest developments in Europe, where Spain formally asked for a bailout from the European Union to shore up its ailing banking sector.
Europe is likely to remain in focus throughout the week, as European leaders are due to hold a summit to discuss the ongoing debt crisis on Thursday and Friday.
Peter Boockvar, managing director at Miller Tabak, said, "With Germany just not giving in to the requests for largesse that the rest of Europe wants them to disperse in the form of socializing debt obligations in the Euro region, nothing of substance will come out of the Thurs/Fri EU summit and markets today are realizing that."
"Without German allowance money, pressure will then build on the ECB to print money to the obvious dismay of the Germans," he added.
Boockvar noted traders are also likely to keep an eye on the U.S. Supreme Court, which is expected to announce its ruling on the healthcare reform law as early as today.
Not long after the open, the Commerce Department is scheduled to release its monthly report on new home sales. Economists expect new home sales to climb to an annual rate of 350,000 in May from 343,000 in April.
by RTT Staff Writer
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