Stock Futures Slide on Greek Debt Impasse

NEW YORK (TheStreet) -- U.S. stock futures were falling Tuesday as investors became fixated on the possibility that Greece could default on its debt obligations.

Futures for the Dow Jones Industrial Average were sliding 54 points, or 59.8 points below fair value, at 12,596. Futures for the S&P 500 were down 7.3 points, or 8.1 points below fair value, at 1304, and futures for the Nasdaq were lower by 10.5 points, or 9.4 points below fair value, at 2425.

Efforts toward providing debt-laden Greece with its second bailout package, backed by the European Union and International Monetary Fund and worth about 130 billion euros ($168 billion), have suffered another setback amid ongoing disagreements over a debt write-down deal.

In order to receive the next bailout package, Greece's private creditors have been asked to help Greece reduce its debt burden by about 100 billion euros by swapping their existing bonds holdings for ones lower in face value by 50% and with far longer maturities and lower interest rates. Private creditors have offered to swap in their existing Greek debt holdings for new ones with coupons of no lower than 4%, but eurozone finance ministers said the offer was still too steep. The euro had slid from a three-week high following the news and was now slipping 0.3% against the U.S. dollar.

Germany's denial of media reports saying that the country is open to boosting the firepower of the eurozone's rescue funds to 750 billion euros ($979 billion) also put a damper on market sentiment Tuesday morning.

"The Europeans are getting their butts kicked as they muddle through the euro-debt crisis, as there's been little thought given to growth and all of the concentration is on German-demanded austerity," said RealMoney columnist and Action Alerts PLUS portfolio manager Jim Cramer. "We could easily use Europe as the reason for a selloff today. We haven't had a selloff in ages and we haven't had anything euro-driven since the beginning of the year when either the bears from across the ocean stopped crossing or they went into hibernation."

London's FTSE 100 was down 0.75%, and Germany's DAX was falling 0.91%. In Asia, Japan's Nikkei Average closed 0.22% higher. Hong Kong's Hang Seng index settled up 0.84%.

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Tuesday is also a day heavy with corporate earnings reports from bellwether stocks.

Apple(AAPL), the iPhone and iPad maker, reports fiscal first-quarter earnings after the closing bell Tuesday and analysts are expecting profit of $10.08 a share on revenue of $38.85 billion. If Apple hits that revenue number, it will have delivered sequential revenue growth of 37% from its fourth-quarter total of $28.27 billion. Shares were off 0.6% to $424.80 in premarket trading Tuesday.

Fast-food chain McDonald's(MCD) beat analysts' estimates by delivering fourth-quarter earnings of $1.38 a share, up from $1.16 a share a year earlier, on revenue of $6.82 billion. Analysts expected profit of $1.29 a share on revenue of $6.8 billion. Shares were edging higher by 0.5% to $101.40.

Verizon Communications (VZ) reported fourth-quarter adjusted earnings of 52 cents share, excluding one-time items, on revenue of $28.44 billion. Analysts were looking for the telecommunications giant to earn 53 cents a share on revenue of $28.38 billion. Wireless revenue rose 13% year over year, factoring n a surge in cellular data revenue. The company reported a fourth-quarter loss of $212 million, or 71 cents a share, compared to a profit of $4.65 billion, or 93 cents, a year earlier. Shares of the company were slipping 2% to $37.62.

Johnson & Johnson(JNJ) reported net earnings of $218 million, or 8 cents a share, in the fourth quarter, down from $1.94 million, or 70 cents a share, a year earlier. Adjusted earnings came in at $1.13, beating the forecast by Thomson Reuters of $1.09 a share. Revenue of $16.27 billion was in line with expectations. For 2012, the company said it expects profit in a range of $5.05 to $5.15 a share, excluding the impact of special items. Shares were down 0.8% to $64.50.

Catastrophe losses cost Travelers(TRV) some profit in the fourth quarter, although the company said that high prices in 2012 will more than offset those losses in 2011. The insurer reported net income of $618 million, or $1.51 a share, for the fourth quarter, down from $8.94 million, or $1.95 a share, in the year-earlier fourth quarter. Operating income came in at $609 million, or $1.48 a share, missing the forecast of $1.51 a share. An early snowstorm in the northeastern U.S. and other losses pressured Travelers' bottom line. However, the company said that it saw prices increases across all business lines during the fourth quarter as a result of the "unusual weather patterns," including a rise in commercial accounts and the personal lines business. The stock was losing 1.3% to $59.50 before the bell.

The Federal Open Market Committee kicks off its two-day policy meeting today, and investors will be listening in for any developments related to individual members' forecasts of where they think the benchmark overnight lending rate should be heading in the coming years and what that may mean for long-term borrowing rates.

U.S. stocks closed mixed Monday as strength in energy shares offset weakness elsewhere amid fears that Greece may be heading toward a disorderly default.

March oil futures were down 33 cents to $99.25 a barrel, while February gold futures were falling $10.40 to $1,667.90 an ounce.

The benchmark 10-year Treasury was trading sideways with a yield of 2.055%, while the U.S. dollar index was up 0.2% to $79.96.

-- Written by Andrea Tse in New York.

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