Tuesday, October 4, 2011
(Reuters) - Stock index futures fell on Tuesday, a day after equities hit
13-month lows, on increased worries about a major banking crisis in Europe and
expectations Greece would default
soon.
* Wall Street has fallen for the past two sessions and the broad S&P 500 index was on the verge of entering bear market territory.
* The STOXX Europe 600 Banking Index .SX7P sank 4 percent on Tuesday while Franco-Belgian bank Dexia (DEXI.BR) plummeted 17 percent to a record low because of its Greek exposure. European shares tumbled 2.6 percent. .EU
* U.S. banks were likely to remain in focus and continue to be pressured by the same issue. On Monday, Morgan Stanley (MS.N) closed at its lowest since December 2008.
* European finance ministers were considering making banks take bigger losses on Greek debt and delayed a vital aid payment to Athens until mid-November, setting up a crunch point in the region's sovereign debt crisis.
* S&P 500 futures fell 6.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures sank 81 points, and Nasdaq 100 futures lost 11.5 points.
* The benchmark S&P is down 19.4 percent and near bear market territory, which would be a 20 percent decline from its recent high set on April 29.
* Later Tuesday, U.S. Federal Reserve Chairman Ben Bernanke will testify before the Joint Economic Committee in Washington on the economic outlook.
* Data on durable goods and factory orders, both for August, will also be released at 10 a.m. EDT.
* Fast food chain operator Yum! Brands Inc (YUM.N) is on tap to report quarterly results.
* Apple Inc (AAPL.O) is expected to unveil a new version of its popular iPhone, hoping to fend off hard-charging rivals running Google Inc's (GOOG.O) Android system.
* The Dow and S&P dropped more than 2 percent on Monday, slumping to 13-month lows in heavy volume on fears Greece's debt woes could spark a full-blown banking crisis in Europe. The Nasdaq fell more than 3 percent.
* Wall Street has fallen for the past two sessions and the broad S&P 500 index was on the verge of entering bear market territory.
* The STOXX Europe 600 Banking Index .SX7P sank 4 percent on Tuesday while Franco-Belgian bank Dexia (DEXI.BR) plummeted 17 percent to a record low because of its Greek exposure. European shares tumbled 2.6 percent. .EU
* U.S. banks were likely to remain in focus and continue to be pressured by the same issue. On Monday, Morgan Stanley (MS.N) closed at its lowest since December 2008.
* European finance ministers were considering making banks take bigger losses on Greek debt and delayed a vital aid payment to Athens until mid-November, setting up a crunch point in the region's sovereign debt crisis.
* S&P 500 futures fell 6.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures sank 81 points, and Nasdaq 100 futures lost 11.5 points.
* The benchmark S&P is down 19.4 percent and near bear market territory, which would be a 20 percent decline from its recent high set on April 29.
* Later Tuesday, U.S. Federal Reserve Chairman Ben Bernanke will testify before the Joint Economic Committee in Washington on the economic outlook.
* Data on durable goods and factory orders, both for August, will also be released at 10 a.m. EDT.
* Fast food chain operator Yum! Brands Inc (YUM.N) is on tap to report quarterly results.
* Apple Inc (AAPL.O) is expected to unveil a new version of its popular iPhone, hoping to fend off hard-charging rivals running Google Inc's (GOOG.O) Android system.
* The Dow and S&P dropped more than 2 percent on Monday, slumping to 13-month lows in heavy volume on fears Greece's debt woes could spark a full-blown banking crisis in Europe. The Nasdaq fell more than 3 percent.
U.S. Stock-Index Futures Drop; S&P 500 May Extend One-Year Low
By Adam Haigh - Oct 4, 2011 4:56 AM ET
Futures on the S&P 500 expiring in December slid 0.2 percent to 1,084.1 at 9:54 a.m. in London, erasing earlier gains of as much as 0.7 percent. Dow Jones Industrial Average futures lost 28 points, or 0.3 percent, to 10,501.
“We are getting all these mixed macro signals,” said Peter Garnry, an equity strategist at Saxo Bank A/S, in an interview with Linzie Janis on Bloomberg Television’s“Countdown” from Hellerup, Denmark. “We still have all these issues in Europe and a very fragile banking system. It’s very difficult to predict where the market will go in either direction.”
Investors who bought S&P 500 shares three years ago and held on to the stocks have made no profit. The gauge closed at 1,099.23 yesterday, the same closing level as on Oct. 3 2008 and the benchmark measure’s lowest close since Sept. 8, 2010.
The S&P 500 came within 1 percent of extending its decline from this year’s high to 20 percent, the common definition of a bear market. Losses accelerated in the S&P 500 after the gauge fell below a series of levels considered significant by analysts who base their investment decisions on charts. The index slipped below 1,119.46, its previous lowest close of the year, just before 12:50 p.m. and breached 1,114.22, the worst intraday level from September, about 15 minutes later.
Bear Markets
Concern governments may be running out of tools to keep the global economic slowdown from worsening has left equities fromSao Paolo to Hong Kong and Frankfurt in bear markets. Bank of America Corp. (BAC) lost 9.6 percent yesterday and has slumped 59 percent in 2011. The declines have confounded bullish investors who speculated the recovery that began in March 2009 would boost stocks for a third year.Companies in the benchmark gauge for American equities trade at 9.8 times 2012 forecast earnings, compared with the average in economic contractions since 1957 of 13.7, according to data compiled by Bloomberg. At the same time, analysts have cut projections for profits next year by 2.6 percent to $110.78 a share, the biggest eight-week drop since 2009, the data show.
McGraw-Hill Cos. may move after the finance and media company that is splitting in two agreed to sell its nine television stations to E.W. Scripps Co. for $212 million.
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