Economic fears are haunting markets without any respite, if the trading in index futures is anything to go by. The major U.S. index futures are pointing to a notably lower opening after Spanish concerns rose manifolds, triggering a rise in the nation's 10-year bond yields to new euro area highs. Traders are now seeing the inevitable- an eventual break up the eurozone, which can have a very deleterious impact on the global economy. The domestic economy is not behaving any better either. Negative economic data and lukewarm earnings are coming in thick and fast, increasing the nervousness of traders.
As of 6:17 am ET, the Dow futures are down 149 points and the S&P 500 futures are declining 15 points, while the Nasdaq 100 futures are plunging 33.25 points.
U.S. stocks ended the week ended July 20th lower, as economic worries continued to drive traders away from risky bets. Some lackluster domestic economic data and insipid earnings reports marred the economic picture and accentuated economic worries.
A trio of housing market reports, the first read of second quarter GDP, the results of a consumer sentiment survey and the weekly jobless claims report are among the key economic reports due for the unfolding week.
Traders may stay tuned to the Commerce Department's new home sales report for June, the National Association of Realtors' pending home sales index for June, the Commerce Department's durable goods orders report for June, advance estimate of first quarter GDP and the final reading of the consumer sentiment survey by Reuters and the University of Michigan.
The Federal House Finance Agency's house price index for May, a few regional manufacturing reports and the Treasury auctions of 2-year, 5-year and 7-year notes round up the economic events/data of the week.
The results of a survey by the Chicago Federal Reserve are due to be released at 8:30 am ET. The national activity index compiled based on the survey is expected to improve slightly to -0.33 in June from -0.45 in May.
In corporate news, AT&T (T) announced that it has reached tentative agreements with the Communications Workers of America in core wireline contract negotiations for the AT&T Midwest region and AT&T Corp. The company also clarified that it is continuing to negotiate with the CWA workers in the East and West regions.
CNOOC (CEO) announced a definitive agreement to buy all outstanding shares of Nexen (NXN) for $27.50 per share in cash. The total deal value is $15.1 billion.
Baidu.com (BIDU), Crane (CR), CTS Corp. (CTS), Fidelity National (FNF), Health Management (HMA), J&J Snack Foods (JJSF), Owens & Minor (OMI), Rent-A-Center (RCII), Sanmina-SCI (SANM), Steel Dynamics (STLD), Texas Instruments (TXN), Vmware (VMW), Volterra Semiconductor (VLTR), Waste Connections (WCN) and Zions Bancorp. (ZION) are among the companies due to release their results after the markets close.
The major Asian averages retreated sharply as worries concerning peripheral Eurozone nations intensified. Spanish bond yields were hovering around new euro area record highs, reflecting the risk aversion among investors.
Japan's Nikkei 225 average closed down 161.55 points or 1.86 percent at 8,508, its lowest closing level since June 8th, 2012. A majority of stocks declined, with Sumco, Pioneer, Ricoh, Furukawa, Denki Kagaku and Nippon Light Metal leading the slide. The yen's climb to a nearly 12 year low against the euro sent traders scurrying from export stocks.
Australia's All Ordinaries declined steeply in early trading and steadily thereafter until the afternoon. Subsequently, the index moved sideways before closing 71.40 points or 1.69 percent lower at 4,159. The declines were spearheaded by energy and material stocks, which slumped in reaction to the sharp retreat in oil and metal prices.
Hong Kong's Hang Seng Index closed at 19,054, down 587.33 points or 2.99 percent. China's Shanghai Composite Index slid 1.26 percent and South Korea's Kospi ended down 1.84 percent.
The monthly report published by Japan's Cabinet Office showed that the government is committed to work with the Bank of Japan to prevent the adverse impacts of the yen appreciation and a deflationary environment.
Producer prices in Australia rose more than expected in the June quarter, according to a report released by the Australian Bureau of Statistics. The monthly producer price inflation came in at 0.5 percent compared to the 0.3 percent expected by economists. The annual rate was also more than expected at 1.1 percent.
European stocks are also retreating sharply amid fears about the collapse of the euro union. The fiscal situation in Spain is worsening, giving rise to speculation that the nation, which recently received a part of the aid for its ailing banking system, may be forced to seek a full-fledged bailout. Meanwhile, the troika is expected to visit to Athens tomorrow to review the progress Greece has made with respect to the austerity program it had pledged to bring in fiscal discipline.
Earnings from Dutch consumer electronics giant Philips (PHG) came as a welcome relief, as it reported profit growth for all of its units in the second quarter. The company's June quarter profit came in at 167 million euros, as it countered the weakness in Europe by strong performance in the U.S. and the emerging markets.
Commodities and risk currencies are also trading notably lower.
by RTT Staff Writer
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