Stock Futures Waffle on ECB Plan
NEW YORK (TheStreet) -- Stock futures were waffling after the European Central Bank's plans to expand lending triggered an enormous response from financial institutions, highlighting the deep funding pressures they continue face.
Futures for the Dow Jones Industrial Average were falling 24 points, or 26.6 points below fair value, at 12,007. Futures for the S&P 500 were losing 3.4 points, or 3 points below fair value, at 1233, and futures for the Nasdaq were shedding 4.8 points, or 16.4 points below fair value, at 2262.
Software giant Oracle's miss on quarterly earnings for the first time in a decade was also pressuring technology stocks, with the company reporting adjusted second-quarter earnings of 54 cents a share. That fell short of the average analyst target of 57 cents, according to Thomson Reuters.
Stock futures initially advanced on the ECB's decision to extend three-year loans, or loans with maturities lasting more than about a year, to more than 500 banks. But they began wavering on realizations by investors that the overwhelming response of financial institutions to the offer -- 523 banks in total -- was a sign that they continue to face big funding pressures in the market, forcing the ECB to take on a role akin to that of the lender of last resort.The central bank is allotting €489 billion in loans, a record amount for a single operation, at a low benchmark interest rate of 1%. That's more than the €300 billion analysts surveyed by Reuters and Bloomberg were expecting. The ECB extending easy money to banks that are already heavily exposed to risky eurozone debt was also drawing attention to the increasing drag on its balance sheet. Germany's DAX was down 0.29%, while London's FTSE was falling 0.54%. Overnight, Japan's Nikkei Average finished 1.48% higher, and Hong Kong's Hang Seng Index closed up 1.86%. Stocks surged Tuesday as investors took heart from improvements in U.S. homebuilding, positive German economic data and a successful Spanish debt auction.
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