NEW YORK ( TheStreet) -- Stock futures were sliding Tuesday as the political gridlock in Greece spooked investors.
Reports that Spain will bailout the country's third-largest bank by assets, Bankia, was also adding to ongoing uncertainty in the eurozone.
Futures for the Dow Jones Industrial Average were giving up 33 points, or 26.5 points below fair value, at 12,926. Futures for the S&P 500 were shedding 2.1 points, or 2.2 points below fair value, at 1364, and futures for the Nasdaq were losing 7.3 points, or 6.7 points below fair value, at 2629.
Stocks barely budged Monday as Wall Street reacted with restraint to the shifting political landscape in Europe following weekend elections in France and Greece.But investor worries intensified Tuesday as the political gridlock in Greece showed no signs of relief. "Greece is still facing a very, very difficult task in order to stay in the eurozone," said Dan Greenhaus, chief global strategist at BTIG. The Greek conservative New Democracy party, which garnered most of the votes in Sunday's election, has failed to form a new government. The onus is now on Alexis Tsipras, the leader of the second-biggest party, the radical left Syriza. His party wants to wipe out the European Union austerity measures tied to the financial bailouts. Expectations are that Tsipras won't reach any breakthroughs either, and that Greece will eventually be forced to hold another general election. Without a government to negotiate the next tranche of a bailout, the global markets face the growing risk of Greece defaulting on its debt and exiting the euro. The next government must decide by next month if it will pay interest on $250 million of 4.5% notes expiring in 2016, and by next week if it will pay €436 million ($568 million) due on a floating-rate note issued 10 years ago. No major U.S. economic news is scheduled for Tuesday. In Europe, London's FTSE was ticking up 0.2% and the DAX in Germany was off 0.1%. The Hang Seng Index in Hong Kong finished down 0.3%. Japan's Nikkei average rose 0.7%. A Financial Times report said Spain was planning a state bailout of Bankia. The report said the move would likely involve the injection of billions of euros of public money into the troubled lender. The benchmark 10-year Treasury was rising 8/32, diluting the yield to 1.852%. The dollar was up 0.1%, according to the dollar index. In commodity markets, the June crude oil contract was off 56 cents at $97.38 a barrel. June gold futures were falling $11.20 to $1,627.90 an ounce. In corporate news, Wendy's (WEN) reported first-quarter earnings Tuesday of $12.3 million, or 3 cents a share, a turnaround from a year-earlier loss of $1.4 million. Excluding items, earnings in the latest quarter were 1 cent a share. The fast food chain's first-quarter sales were $519.9 million, up from $509.3 million a year earlier. Analysts, on average, expected first-quarter profit of 3 cents a share on sales of $608 million. Wendy's lowered its 2012 outlook for adjusted earnings before interest, taxes, depreciation and amortization to a range of between $320 million and $335 million. Previously, the company anticipated adjusted EBITDA of between $335 million and $345 million. Wendy's cited weaker-than-expected sales and margins. Walt Disney (DIS) is expected by analysts Tuesday to post fiscal second-quarter earnings of 55 cents a share on revenue of $9.56 billion. Rackspace Hosting (RAX), the cloud hosting company, reported first-quarter earnings of $23.2 million, or 17 cents a share, up from year-earlier earnings of $13.8 million, or 10 cents a share. Analysts, on average, expected earnings of 18 cents a share. Rackspace said currency rates hurt the company's first-quarter revenue by $2 million. McDonald's (MCD) said Tuesday that global same-store sales in April rose 3.3%. Last month, the fast food chain said it expected sales to rise about 4%.
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