The downgrades of nine eurozone nations by Standard and Poor’s Friday, including AAA-rated France and Austria, coupled with the downgrade Monday of the fund that guarantees Europe’s bailouts, the European Financial Stability Fund (EFSF), is being overlooked Tuesday morning by investors.
U.S. stocks futures are indicating a sharply higher open in trading. (Markets were closed Monday for the Martin Luther King, Jr. holiday.)
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Stocks were lower on Friday in anticipation of the European downgrades that came after the closing bell, though U.S. stocks finished the week modestly higher.
Meanwhile, there’s positive data around the globe this morning. China’s economic growth in the final three months of last year rose more than expected, to 8.9%; that, however, was a two-and-a-half-year low for China’s GDP.
Inflation in the 17 nations that share the euro eased in December, and confidence in Germany – as indicated by the ZEW indicator of economic sentiment – rose in January, marking the strongest reading since July.
Carnival Corp. (NYSE:CCL) shares are tumbling in the wake of the partial sinking of the Costa Concordia cruise liner off the west coast of Tuscany over the weekend. Carnival shares lost nearly a fifth of their value in London trading yesterday, and are indicating a loss of greater than 15% in U.S. trading today.
This is peak reservation season for cruise bookings and many cruise companies have already slashed some fares for 2012 amid weakened demand, primarily from Europe. Now they’re battling a crisis of confidence as well.
Carnival – which owns the Costa Concordia – says it will take a $90 million hit because of the tragedy.
Banks will also be in focus Tuesday. Citigroup (NYSE:C) reported fourth quarter earnings of 38 cents a share, missing Wall Street's expectations of 49 cents, while revenue of $17.2 billion also missed views.