U.S. Stock Futures Drop Amid Concern European Crisis Worsening
Monday, 05 Sep 2011 02:44 PM
U.S. stock futures fell, indicating the Standard & Poor’s 500 Index may slide for a third day when exchanges open tomorrow, as European markets showed growing concern the sovereign debt crisis is worsening.
Bank of America Corp. declined 5.8 percent and Citigroup Inc. dropped 4 percent in German trading as banks led the Stoxx Europe 600 Index to a 3.9 percent retreat. Alcoa Inc., the largest U.S. aluminum producer, slumped 3.7 percent in Germany.
S&P 500 futures expiring in September lost 2.5 percent to 1,140.30 at 10:25 a.m. in New York. U.S. markets are closed for the Labor Day holiday. The MSCI All-Country World Index fell 2.1 percent as Italian bonds dropped for an 11th day, Spanish debt declined and the cost of government and bank default insurance rose to records.
“As soon as you see spreads increasing in Italy and Spain, you get the whole concern about the sustainability of the euro zone going on,” said Joost van Leenders, who helps oversee $787 billion as a strategist at BNP Paribas Investment Partners in Amsterdam. “That is reflected in equity markets today. It’s hurting sentiment, and then there’s concern with the banking industry that market stress could affect lending. That drives investors away from the most risky assets.”
U.S. stocks fell last week as the S&P 500 posted its biggest monthly decline in more than a year and a report showing employment stagnated in August fueled concern the economy may slip into a recession. The S&P 500 fell 0.2 percent to 1,173.97 as a 2.5 percent slide on the last day wiped out gains from earlier in the week.
Last week’s retreat was triggered by government data showing U.S. payrolls were unchanged in August, the weakest reading since September 2010. The median forecast in a Bloomberg News survey called for an increase of 68,000. Hourly earnings and hours worked both declined. The August data included a 48,000 drop in information industry jobs, mostly reflecting striking Verizon Communications Inc. workers.
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U.S. stock futures fell, indicating the Standard Poor s 500 Index may slide for a third day when exchanges open tomorrow, as European markets showed growing concern the sovereign debt crisis is worsening.Bank of America Corp. declined 5.8 percent and Citigroup Inc....