NEW YORK (TheStreet) -- U.S. stock futures were falling Monday as market attention turned to a European debt summit and the still unresolved problems in Greece.
Futures for the Dow Jones Industrial Average were down 102 points, or 95 points below fair value, at 12,512. Futures for the S&P 500 were down 12 points, or 12 points below fair value, at 1301. Futures for the Nasdaq were down 20 points, or 22 points below fair value, at 2436.
European Union leaders meet in Brussels Monday for their first summit of 2012 to finalize steps for a rescue fund of $661 billion to be up and running later this year. Greece and its private creditors, meanwhile, signaled they would agree on a deal in which investors will accept a bigger cut on their government debt holdings. The two sides are "close" to an agreement following three days of talks in Athens, according to Bloomberg.
Only when the debt swap in Greece is resolved can the country receive a second bailout from the International Monetary Fund and other European creditors, which would help Greece avoid a default. The Greece government is under growing pressure to work out a deal given that it faces a €14.5 billion bond payment on March 20. Meanwhile, Germany wants Athens to give up control over its budget policy in talks over the bailout package, according to Reuters.In Europe, French bank shares were pressured after President Nicolas Sarkozy said he would impose a financial-transaction tax. A reading on consumer sentiment in the eurozone rose less than expected, according to the European Commission in Brussels. Germany's DAX was down 1.17% while London's FTSE was down 1.04%. In Asia, China signaled that it would hold back from further monetary easing, in particular by leaving bank reserve requirements unchanged. Japan's Nikkei Average settled 0.54% lower and Hong Kong's Hang Seng lost 1.66%. Consumers are boosting their savings, suggesting a slowdown demand. The Department of Commerce reported that U.S. personal income rose 0.5% in December, beating an estimated 0.4% increase, according to Thomson Reuters, and adding to a 0.1% increase in the prior month. However, in the same report, spending was flat after a 0.1% increase in November. No other major economic news is expected Monday, although investors are looking forward to the government's unemployment report for January at the end of the week. With just two trading days left in January, the Dow, up 3.6% for the month, is on pace for its largest monthly percentage gain since 1997. The index, down 0.5% last week, saw its first week of losses in 2012. The melt-up in the market has lost some steam in recent sessions, although many analysts say that investors will likely take this as a buying opportunity. "Stocks overall remain very resilient, permitting the banks to correct about 3% [last week] without the weakness really bleeding into the broader indices," wrote Peter Tuz, president at Chase Investment Counsel. "People remain pretty skeptical about stocks ... buyers continue to aggressively take advantage of dips but many do so only grudgingly."
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