Published June 24, 2013
FOX Business: Capitalism Lives Here
U.S. stock-index futures joined a global selloff Monday, suggesting Wall Street could open with heavy losses on mounting worries about China and rising Treasury yields.
As of 8:08 a.m. ET, Dow Jones Industrial Average futures slid 128 points to 14583, S&P 500 futures dipped 15.3 points to 1569 and Nasdaq 100 futures dropped 20.3 points to 2845.
The markets took their heaviest losses since April last week after details on the Federal Reserve's plans to scale back its bond-buying program shook traders' confidence in the world economy. That gloomy sentiment cascaded into Monday, with markets in Asia and Europe taking a beating.
Traders broadly pointed to a mix of factors for fresh tension in global markets.
One growing concern has been instability in China's credit markets. The People's Bank of China issued a statement saying it would "fine-tune" its monetary policy, according to analysts at Nomura. The Japan-based investment bank said it is "not convinced that the policy stance has
shifted from tightening to loosening."
There have been worries brewing that a rapid expansion in China's lending markets will lead to troubles for banks there. Indeed, Moody's sliced its outlook on Hong Kong's banking sector to "negative" over concerns "persistent negative real interest rates and potential property bubbles in the territory, and banks' growing exposures to Mainland China, all of which may contribute to adverse future operating conditions for Hong Kong banks."
In a sign of the growing turmoil in Asia, the Shanghai Shenzen CSI 300, a benchmark barometer for China markets, nose dived 6.3% on the day.
U.S. Treasury bonds came under continued selling pressure as well as traders continued worrying about the Fed's plans to exit its asset-purchase program. The benchmark 10-year yield jumped 0.097 percentage point to 2.641%. The rate has surged some 60% since hitting a low in May -- which is the biggest lurch higher over that time frame since 1962, according to Dan Greenhaus, chief global strategist at market-maker BTIG.
There are no major economic reports on tap for Monday. However, several key reports are out throughout the week, including three on the housing market and two on consumer sentiment.
On the corporate front, Tenet Healthcare (THC) said it will buy Vanguard Health (VHC) in a deal valued at $4.3 billion. Meanwhile, Citigroup (C) will be the first U.S. bank to open operations in Iraq.
In commodities, gold continued sliding after plummeting last week. The precious metal recently fell $8.80, or 0.67%, to $1,283 a troy ounce. Oil dipped 15 cents, or 0.16%, to $93.55 a barrel. Wholesale New York Harbor gasoline was flat at $2.753 a gallon.