Greek Concerns Weigh on U.S. Futures
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U.S. stock-index futures headed into the red on Tuesday on worries that Greece's struggle to form a new government may threaten to put the country's bailout agreement in jeopardy.
As of 9:00 a.m. ET, Dow Jones Industrial Average futures fell 69 points to 12890, S&P 500 futures slipped 6 points to 1360 and Nasdaq 100 futures dipped 16.3 points to 2620.
Elections over the weekend in Greece saw the two mainstream political parties there failing to hold a combined majority in parliament. The PASOK and New Democracy parties had been critical players in drafting agreements with eurozone leadership on implementing deficit-cutting measures in exchange for bailout funds needed to avoid a default.
Reeling from the painful economic consequences of the austerity measures, votes were distributed between PASOK, New Democracy and several other parties, all of which are trying to push for their own policies. All of the groups now have to work together in forming a coalition government, which would require an agreement from no less than three parties, according to The Wall Street Journal.
A situation where no government is formed may prompt fresh elections, while one that backtracks on austerity agreements may put the country's crucially needed bailout at stake. In either case, analysts say the chance of a Greek exit from the eurozone currency bloc can't be ruled out.
"Greece is a big concern," said David Jones, chief market strategist at London-based IG Index, adding that such a situation would "definitely inject a lot of volatility into the market." Still, Jones cautioned that it may be awhile until the picture there becomes clearer, meaning market participants are still largely in "wait and see mode."
Eurozone blue chips were down 0.93%, while markets in London were down by a slimmer margin, having missed out on gains in the last session. The euro fell 0.13% to $1.3029.
Meanwhile, U.S. oil futures were under pressure for the fifth session in a row, having shed close to $9 over the period. On the day, crude was lower by 69 cents, or 0.7%, to $97.25 a barrel. Wholesale New York harbor gasoline slipped 0.04% to $2.97 a gallon.
In metals, gold fell $10.30, or 0.62%, to $1,629 a troy ounce.
On the corporate front, McDonald's (NYSE:MCD) said its global same-store sales climbed 3.3% in April, a slimmer gain than the 4.29% analysts expected, according to Dow Jones Newswires.
European blue chips fell 0.93%. the English FTSE 100 slipped 0.15% to 5646 and the German DAX dipped 0.82% to 6516.
In Asia, the Japanese Nikkei 225 rose 0.69% to 9182 and the Chinese Hang Seng slumped 0.25% to 20485.