After ending the previous session notably lower, stocks could see some further downside in early trading on Tuesday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 20 points.
Renewed concerns about the financial situation in Europe are likely to contribute to any early weakness on Wall Street after helping to drag stocks sharply at the start of trading on Monday.
Adding to the worries about Europe, credit ratings agency Moody's revised the outlooks on the Aaa sovereign ratings of Germany, the Netherlands and Luxembourg to negative from stable.
Moody's cited the rising uncertainty regarding the outcome of the euro area debt crisis, which stems in part from the increased likelihood of Greece's exit from the euro area.
In other troubling news out of Europe, flash estimates released by Markit Economics showed that its manufacturing index for the eurozone slid 1 point to 44.1 in July. On the other hand, the services index rose 0.5 points to 47.6.
The composite index for both industries remained below 50 for the sixth consecutive month, holding unchanged at 46.4, in line with expectations.
On the other hand, a similar report from Markit Economics revealed that the purchasing managers index for China came in at 49.5 in July, up from 48.2 in June.
While the index remained below the key 50 level, it suggested the slowest contraction in manufacturing activity in five months. The modest improvement came about due to a rebound in output.
Traders are also digesting the latest batch of earnings news, including quarterly results from well known companies such as AT&T (T) and DuPont (DD).
AT&T could see early strength after reporting better than expected second quarter earnings, while DuPont may come under pressure after providing disappointing guidance.
After moving sharply lower at the start of trading on Monday, stocks regained some ground over the course of the session but still ended the day firmly in the red.
The major averages moved roughly sideways going into the close of trading, stuck in negative territory. The Dow fell 101.11 points or 0.8 percent to 12,721.46, the Nasdaq slid 35.15 points or 1.2 percent to 2,890.15 and the S&P 500 dropped 12.14 points or 0.9 percent to 1,350.52.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. While Japan's Nikkei 225 Index edged down by 0.2 percent, China's Shanghai Composite Index crept up by 0.2 percent.
Meanwhile, the major European markets have moved modestly lower on the day. The U.K.'s FTSE 100 Index is down by 0.2 percent, while the German DAX Index and the French CAC 40 Index are both down by 0.1 percent.
In commodities trading, crude oil futures are sliding $0.64 to $87.50 a barrel after tumbling $3.69 to $88.14 a barrel on Monday. Gold futures are slipping $3.60 to $1,573.80 an ounce. In the previous session, the precious metal fell $5.40 to $1,577.40 an ounce.
On the currency front, the U.S. dollar is trading at 78.25 yen compared to the 78.39 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2085 compared to yesterday's $1.2117.
by RTT Staff Writer
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