Stock Futures Edge Higher as Traders Mull Rating Moves


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Stock-index futures edged higher as traders mulled a warning from Standard & Poor's saying it may cut the rating on Europe's bailout facility after saying it may make a similar move on nearly the entire eurozone.

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Today's Markets

As of 9:00 a.m. ET, Dow Jones Industrial Average futures rose 15 points to 12,081, S&P 500 futures gained 0.25 point to 1,255 and Nasdaq 100 futures climbed 3.8 points to 2,329.

S&P's surprise ratings move came as "systemic stresses in the euro zone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the euro zone as a whole," the ratings company said in a release shortly after the close of trading on Monday. Among the countries that could receive a downgrade are Germany, France and four other countries that presently retain top-notch ratings.

The German-Franco warning is particularly significant because those countries represent the biggest economies in Europe, and backers of the bloc's bailout fund.  Indeed, S&P cautioned Tuesday that the fund may lose its triple-A rating if the underlying countries are cut.

However, the markets' reaction was "muted" on Tuesday because ratings companies have "lost their clout" among traders, James Hughes, a senior market analyst with Alpari said in an interview with FOX Business.  The companies have come under pressure for what some analysts see as overly optimistic ratings on mortgage-backed securities during the financial crisis, and similarly rosy projections for European sovereign debt.

European blue chips fell 0.25%, while the euro rose 0.16% to $1.3409. Yields on Italian debt are up slightly after the move by S&P, but still off the painful 7% mark.  The country's 10-year bond yields 6.4% presently, and investors demand a 4.16 percentage-point premium to hold its debt over safe-haven German bunds.

On the corporate front, AutoZone (NYSE:AZO) unveiled fiscal first-quarter profits of $4.68 a share, zipping past estimates of $4.44.  Sales jumped 7% to $1.92 billion, also topping estimates of $1.89 billion.

The economic calendar is light all week, with no major reports on tap for Tuesday.

Energy markets were broadly higher.  The benchmark crude oil contract traded in New York rose 24 cents, or 0.22%, to $101.17 a barrel.  Wholesale RBOB gasoline climbed a penny to $2.62 a gallon.

In metals, gold fell $12.30, or 0.71%, to $1,722 a troy ounce. U.S. Treasury yields pushed higher as traders shed the asset.  The benchmark 10-year note yields 2.079% from 2.062%.

Foreign Markets

European blue chips fell 0.25%, the English FTSE 100 rose 0.09% to 5,573 and the German DAX dipped 0.67% to 6,065.

In Asia, the Japanese Nikkei 225 slid 1.4% to 8,575 and the Chinese Hang Seng sunk 1.2% to 18,942.

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