Futures Fall as Focus Shifts to Italy

NEW YORK (TheStreet) -- U.S. stock futures pointed to a lower open as worries over Italy's ability to deal with its debt problems overshadowed relief that Greece would secure further bailout money.

Futures for the Dow Jones Industrial Average were down 56 points, or 43 points below fair value, at 11,885. The Dow snapped a five-week winning streak last week, taking off 250 points.

Futures for the S&P 500 were down 8 points, or 7 points below fair value, at 1243. Futures for the Nasdaq were down 9 points, or 11 points below fair value, at 2341.

After a busy week filled with central bank meetings, a modestly positive U.S. jobs report and mixed earnings reports, markets are headed for a quieter week in terms of economic data. However, a scheduled vote in Italy over austerity cuts as well as discussions on bailout efforts by euro area leaders in Brussels are keeping investors on tenterhooks.

The vote on budget reforms in Italy is effectively a test of Prime Minister Berlusconi's leadership and a key indication of whether the country can deal with its debt problems. Yields on 10-year Italian government debt hit a 14-year high Monday of 6.59%.

Meanwhile, the situation in Greece looks more stable after the country came to an agreement to accept an aid package from its European neighbors that will allow Greece to avoid default in the near term. The resignation of Greek Prime Minister George Papandreau has given investors some clarity on Greece's future. Political turmoil and a lack of progress from euro area leaders on dealing with the debt crisis sent the three major averages each down close to 2% last week.

On Monday, London's FTSE was falling 0.8%, and Germany's DAX was shedding 0.4%. Japan's Nikkei Average finished down 0.4%, and Hong Kong's Hang Seng lost 0.8%.

Europe aside, investors are increasingly tuning into how the U.S. plans to reduce its budget deficits ahead of a Dec. 23 deadline set by lawmakers.

"Attention not centered on Europe will focus on the deficit super committee," writes Dan Greenhaus, global markets strategist with BTIG. "Investor sentiment might be boosted if a proposal [from Washington D.C.] is bipartisan and larger than expected."

In corporate news, BP(BP) was falling 1.3% after the company's planned sale of its $7.1 billion stake in Pan American Energy to China's Cnooc(CEO) fell apart. Bridas Corp., which is owned by China's Cnooc, and by the Bulgheroni family of Argentina, said it scrapped the transaction because of legal reasons and BP's behavior during deal talks.

American Dental Partners(ADPI) jumped 79% after agreeing to be taken private by JLL Partners for $398 million. The dental office operator also beat third quarter earnings estimates.

Pay TV provider DISH Network(DISH) reported third-quarter profit of 71 cents a share, missing the average analyst estimate by 2 cents. Shares were falling 0.8% to $$23.48.

Specialty vehicles provider Force Protection(FRPT) soared 31% to $5.51 after agreeing to a buyout by combat vehicle manufacturer General Dynamics(GD) for $5.52 a share, or roughly $360 million.

Gold for December delivery was gaining $13 to trade at $1769 an ounce. In other commodities, the December crude oil contract edged up 16 cents to trade at $94.42 a barrel.

The U.S. economic calendar's sole report will be reading on consumer credit for September at 3 p.m. Economists expect consumer credit to increase $5 billion after falling for the first time in nine months by $9.5 billion in August.

The euro slipped 0.5% to $1.37 and the dollar index edged up 0.05%. Ten-year U.S. Treasury notes gained 4/32, diluting the yield to 2.026%.

The bulk of earnings season has passed with less than 100 companies on the S&P 500 still left to report.

-- Written by Chao Deng in New York.

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