Stock Futures Plunge on Heightened Europe Concerns
NEW YORK (TheStreet) -- U.S. stock futures were tumbling Monday on anxiety that Greece won't be able to satisfy its bailout requirements, possibly putting the country on a path to exit the eurozone.
There are also rising concerns that Spain could require a full sovereign bailout as the country's borrowing costs spiked up once again. The major U.S. equity indices fell sharply on Friday because of similar worries.
Futures for the Dow Jones Industrial Average were tanking by 193 points, or 184.57 points below fair value, at 12,580. Futures for the S&P 500 were falling by 18.39 points or 18.06 points below fair value, at 1340, and futures for the Nasdaq were declining by 41 points, or 39.69 points below fair value, at 2572.
On Monday, Spanish bonds yields surged to their highest levels since the creation of the euro even after the continent's finance ministers on Friday backed the details of an aid package worth up to €100 billion for Madrid to bolster its troubled banks.Over the weekend, Murcia became the second Spanish region to ask for government financial aid, following Valencia's request late last week. Up to six regions may be next in line to ask for assistance, according to media reports. The euro fell to a more than two-year low against the dollar amid worries about the deepening crisis across the eurozone. Compounding the eurozone anxiety Monday was a report by German magazine Der Spiegel over the weekend that the International Monetary Fund may decide to not help with any more financing for Greece -- highlighting its growing impatience with the burdens of trying to help hold up the country -- as international inspectors pay a visit to Athens beginning on Tuesday. They are expected to demand more spending cuts from Athens in exchange for more aid. The FTSE in London was retreating by 1.73% and the DAX in Germany was recoiling by 1.78% on Monday. The Hong Kong Hang Seng index settled down nearly 3% and the Nikkei in Japan fell 1.86%. September crude oil futures were shedding $2.62 at $89.21 a barrel. August gold futures were slipping $11.10 at $1,571.70 an ounce. The benchmark 10-year Treasury was up by 15/32, diluting the yield to 1.412%, while the greenback was advancing by 0.34%, according to the dollar index. In corporate news, NRG Energy (NRG) said Sunday it reached a deal to buy GenOn Energy (GEN) for $1.7 billion in stock. NRG shares were surging more than 12% in premarket trading while GenOn shares were soaring more than 27%. The merger creates the largest competitive power generation company in the United States. McDonald's (MCD), the fast-food giant, reported below-consensus quarterly earnings and spoke of slower July same-store sales growth than in the second quarter. Shares were down more than 2%. Reporting after Monday's closing bell is chipmaker Texas Instruments (TXN). Shares were trading sideways. Germany's Bayer and Onyx Pharmaceuticals (ONXX) said Monday that Tarceva, a jointly produced drug, in combination with Nexavar tablets for the treatment of hepatocellular carcinoma, a type of liver cancer, failed in further improvement of overall survival. Onyx shares were falling 0.39%. DreamWorks Animation (DWA)reached a deal to buy Classic Media for $155 million. Classic Media owns such titles as "Casper," "Rudolph the Red-Nosed Reindeer" and "Lassie."
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