Stock Futures Slip as ECB Excitement Dims

NEW YORK (TheStreet) -- Stock futures were largely pulling back Monday as enthusiasm about potential intervention by the European Central Bank in the region's sovereign debt markets took a hit.

The ECB has called a report in German magazine Der Spiegel about a plan by the central bank to cap government bond yields in troubled eurozone countries such as Spain and Italy as "misleading."

Also, the Bundesbank threw cold water on anticipation about an ECB bond buying program, saying that it "holds to the opinion that government bond purchases by the Eurosystem are to be seen critically and entail significant stability risks."

Futures for the Dow Jones Industrial Average were slipping 20 points, or 22.2 points below fair value, at 13,227. Futures for the S&P 500 were down 1.2 points, or 1.86 points below fair value, at 1414. Futures for the Nasdaq 100 were up 2.5 points, or 0.80 points below fair value, at 2778.

Meanwhile, the euro was sliding against the dollar by 0.26% on the quashed excitement.

"The suggestion here is that no major program will be announced any time soon, despite what European Central Bank President Mario Draghi suggested at the European Central Bank policy meeting on August 2," said Christopher Vecchio, currency analyst at DailyFX, about the Bundesbank commentary.

The major U.S. equity averages approached highs for the year Friday and extended gains on signs the U.S. economy is performing better than expected. Last week's rally was also supported by German Chancellor Angela Merkel's backing of European Central Bank President Mario Draghi's plan to do "whatever it takes" to support the euro.

There were no major U.S. economic releases scheduled for Monday.

Events this week include Wednesday's release of the minutes from the July 31 to August 1 Federal Open Market Committee meeting and Thursday's jobless claims data connected to the August employment survey period.

On Wednesday and Thursday existing and new home sales reports will be released and on Friday there will be durable goods orders data.

China's economic calendar is slated to include the HSBC flash manufacturing purchasing managers data, expected on Wednesday. In Europe, German economic growth figures and a meeting in Berlin of Merkel and French President François Hollande to discuss the euro crisis on Thursday is expected, as is Greek Prime Minister Antonis Samaras' meeting with these European leaders later this week.

On the corporate front Monday, home improvement retailer Lowe's (LOW) posted second-quarter earnings of 64 cents a share on revenue of $14.25 billion. Analysts surveyed by Reuters expected a profit of 70 cents a share on revenue of $14.46 billion.

Consumer electronics retailer Best Buy (BBY) has named Hubert Joly, former chief executive of hospitality and restaurant giant Carlson, the new CEO of the struggling company, according the Wall Street Journal.

Aetna (AET) has reached a deal to purchase Coventry Health Care ( CVH ) in a transaction valued at $7.3 billion, including the assumption of Coventry debt.

October crude oil futures were falling 5 cents at $96.27 a barrel and December gold futures were down $2.70 at $1,616.70 an ounce.

The benchmark 10-year Treasury was falling 10/32, pushing the yield up to 1.855%. The greenback was flat, according to the dollar index.

The FTSE in London was down 0.05% and the DAX in Germany was up 0.12%.

The Hong Kong Hang Seng index settled up 0.71% and the Nikkei in Japan closed up 0.86%.

2012 Stock Predictions and Outlook

Your one-stop shop for 2012 stock recommendations and market predictions.

-- Written by Andrea Tse in New York.



>To contact the writer of this article, click here: Andrea Tse.