Stock Futures Drop Amid Spain, China Worries

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Mounting concerns about Spain's embattled banking sector and access to capital on the private market, coupled with news that China isn't preparing a fresh round of stimulus, sent U.S. stock-index futures and global markets skidding into negative territory.

Today's Markets

As of 7:55 a.m. ET, Dow Jones Industrial Average futures fell 71 points to 12511, S&P 500 futures dipped 5.8 points to 1228 and Nasdaq 100 futures slid 14 points to 2546.

In yet another sign that the eurozone's debt crisis is spreading from periphery nations straight into the currency bloc's core, market participants were focused squarely on Spain. The Financial Times reported late Tuesday that the European Central Bank was considering a move to block Spain from recapitalizing ailing lender Bankia on legal grounds.

The ECB issued a brief statement on Wednesday, saying contrary to the report, it has not been consulted on the matter. However, the damage had already been done, adding more uncertainty to the already fragile situation. The yield on Spain's 10-year bonds recently traded at 6.63%, close to euro-era highs. That represents a 5.3-percentage point premium to the yield traders pay to hold safe-haven German Bunds.

A statement from the European Commission that the bloc's permanent bailout fund, called the European Stability Mechanism, may be able to directly recapitalize banks helped global markets and the euro claw their way back from session lows.

The common currency fell 0.43% to $1.2449, while the Euro Stoxx 50 dipped 0.78%. The IBEX 35, which is Spain's benchmark stock-market index, fell more than 1% after ending the day Tuesday at a nine-year low.

On the Asian front, Xinhua, China's official news agency, suggested the country won't act to stimulate the world's No.2 economy. There have been worries that the rate of expansion might cool down quickly in what is referred to as a "hard landing" that could reverberate across other large economies.

Wall Street is also set to get fresh data on the housing market. Pending home sales, which are seen as a leading indicator, are expected to have risen 0.1% in April from the month before, economists said ahead of the 10:00 a.m. ET report from the National Association of Realtors.

Commodities were under pressure on the back of a weaker euro and the global concerns that were weighing on equities. The benchmark crude oil contract traded in New York slumped $1.06, or 1.2%, to $89.68 a barrel. Wholesale New York Harbor gasoline dipped 0.63% to $2.89 a gallon.

In metals, gold rose $6.50, or 0.42%, to $1,558 a troy ounce.

Foreign Markets

The Euro Stoxx 50 fell 0.78% to 2143, the English FTSE 100 sold off by 1.3% to 5320 and the German DAX slid 0.72% to 6351.

In Asia, the Japanese Nikkei 225 dropped 0.28% to 8633 and the Chinese Hang Seng tumbled 1.9% to 18690.