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Stock Futures Fall Following G20 Meeting

Stocks in this article: ^DJI ^GSPC ^IXIC


NEW YORK ( TheStreet) -- U.S futures signaled that stocks would follow European equities lower Monday after countries of the G20 held back on providing more financial firepower to the eurozone.

Futures for the Dow Jones Industrial Average were down 50 points, or 54 points below fair value, at 12,911. Futures for the S&P 500 were down 6.9 points, or 7.6 points below fair value, at 1356. Futures for the Nasdaq were down 11.3 points, or 13.7 points below fair value, at 2591.

Stocks were headed for losses after a low-volume rally last week that saw the S&P 500 gain 0.3% and the Dow fail to close above 13,000. In the period through Feb. 21, trading of S&P 500 component shares has fallen 20% compared to that in the same period last year, according to Deutsche Bank.

Buying momentum has been weak with the S&P 500 up 8.6% year-to-date. "This February's gain is the best since 1998, and the best year-to-date rise since 1991," noted Sam Stovall, chief equity strategist with S&P Capital IQ.

The Group of 20 countries rebuffed calls to boost the eurozone's resources. In a weekend meeting, the G20 said Europe must ramp up money to fight the debt crisis before leading economies will provide more funds to the International Monetary Fund. The G20 is moving to create $2 trillion in resources -- with $1 trillion from Europe's temporary and permanent bailout funds and as much as $500 billion for the IMF from countries like Japan and China, adding to the current $385 billion in funds.

The effort to increase the region's firepower would be the G20's greatest since the countries put $1 trillion into Europe three years ago to fight the recession. This comes as Greece is on track to receive its second bailout from European creditors and amid ongoing concern for core economies like Italy and Spain. This afternoon, Germany's parliament is expected to pass a parliamentary vote on Greece's aid package.

Germany's DAX was down 1.2% while London's FTSE was falling 1% on Monday. Japan's Nikkei Average settled down 0.14% and Hong Kong's Hang Seng closed off 0.9%.

U.S. economic data are light on Monday. Pending home sales from the National Association of Realtors will kick off the week's calendar at 10 a.m. EST. Sales are expected to have risen 1% in January, according to Thomson Reuters, following a 3.5% drop in December.

Investors are also expecting a smattering of manufacturing reports from regional Federal Reserve branches, kicking off with the Dallas Fed Manufacturing Survey at 10:30 a.m.

In corporate news, Lowe's (LOW), the home-improvement retailer, reported fourth-quarter profit of 29 cents a share on revenue of $11.63 billion compared with the average analyst expectation of earnings of 24 cents a share on revenue of $11.3 billion. Shares were up 1.8% to $27.62 in premarket trading.

BP's (BP) federal trial over the 2010 Gulf of Mexico oil spill has been delayed for a week to allow more time for settlement talks. The delay was "for reasons of judicial efficiency and to allow the parties to make further progress in their settlement discussions," said U.S. District Judge Carl Barbier, The Associated Press reported. Bloomberg said BP and plaintiffs suing over the oil spill are discussing a $14 billion settlement. Shares were 2.2% higher before the opening bell.

Cheniere Energy Partners (CQP) announced that private equity firm Blackstone (BX) will be investing $2 billion in the company, which would allow it to fund the equity portion of the costs for developing, constructing and placing into service its Sabine Pass, La. natural gas liquefaction plant. As part of the deal, Blackstone will be buying newly issued Cheniere senior subordinated paid-in-kind units. Debt financing for the liquefaction project should be completed by the end of the first quarter. Construction is expected to begin in the first half of 2012. Shares of Cheniere were surging 7.2% to $22.40.

HSBC (HBC), Europe's biggest bank by market value, said full-year profit rose 28%. HSBC posted 2011 net profit of $16.8 billion, up from $13.2 billion a year earlier. HSBC said China, India, Malaysia, Brazil and Argentina were the fastest-growing sources of revenue for the bank. Shares were falling 4.2% to $45.60.

Roche, the Swiss drug giant, extended until March 23 its buyout offer for Illumina (ILMN), the maker of gene-mapping tools. Roche's hostile offer of $44.50 a share, or $5.7 billion, was set to expire on Feb. 24.

AES (AES), the power company, reported fourth-quarter earnings of 23 cents a share on revenue of $4.27 billion, compared with the average analyst expectation of earnings of 22 cents a share on revenue of $3.46 billion.

April oil futures were losing $1.42 to $108.35 a barrel after breaking $109 a barrel in the previous week.

In other commodities, April gold futures were down $4.50 to $1770.60 an ounce. "Reluctance of G20 action continues to keep new buyers at bay-however some consolidation after a few weeks of up move is not negative," said George Gero, precious metals strategist with RBC Capital Markets. "The eurozone is concerned with Italy, Portugal, Spain, and economic recovery so most demand commodities are pausing."

The dollar index was up 0.2%. The benchmark 10-year Treasury was up 9/32, diluting the yield to 1.95%.

-- Written by Chao Deng in New York.

>To contact the writer of this article, click here: Chao Deng.

>To follow the writer on Twitter, go to: @chao_deng

>To submit a news tip, send an email to: tips@thestreet.com.

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