Stock Futures Slide on Greece Default Concerns

NEW YORK ( TheStreet) -- Stock futures were pointing to a steeply lower open Tuesday, extending the previous session's losses, as Greece's call for a referendum on its eurozone bailout package reignited fresh concerns that the country will default on its debts.

Futures for the Dow Jones Industrial Average were down 240 points, or 242 points below fair value, at 11,857. Futures for the S&P 500 were losing 38 points, or 38 points below fair value, to 1211, and Nasdaq futures were off by 55 points, or 55 points below fair value, at 2301.

Stocks remained stuck in negative territory throughout Monday's session as investors took profits at the end of one of the strongest monthly performances for stocks in recent years. The Dow gained nearly 1,042 points in October, marking the largest point advance in its history. On a percentage baisis, the average rose 9.5% -- its best monthly percentage performance since October 2002, according to Dow Jones Indexes.

Greek Prime Minister George Papandreou surprised global markets late Monday by calling for a referendum on Greece's newly announced bailout package, putting the country at risk for default if voters reject the plan. The prime minister believes voters will support economic reforms, but the country's series of protests and work strikes suggest otherwise. Uncertainty is still enshrouding Europe despite leaders' recent plan to address the region's sovereign debt crisis.

Asian markets sold off on the renewed eurozone uncertainty and as data released on Tuesday showed that manufacturing activity in China slowed in October. China's Purchasing Managers' Index fell to a reading of 50.4 after September's level of 51.2. Hong Kong's Hang Seng dropped 2.5% and Japan's Nikkei Average finished 1.7% lower. In Europe, London's FTSE was falling 2.8%, and Germany's DAX was plunging 4.3%.

The euro was falling 1.14% against the greenback, which was up 1.05% against a basket of currencies, according to the dollar index.

The stronger greenback continued to dampen the appeal of dollar-priced assets. The December gold contract was losing $22.70 to trade at $1,702.50 an ounce. Crude oil for December delivery was trading $2.62 lower at $90.57 a barrel.

The benchmark 10-year Treasury was last gaining 20/32, diluting the yield to 2.043%.

Also on Monday, trading firm MF Global ( MF) became the biggest U.S. casualty from the European debt crisis when it filed for Chapter 11 bankruptcy protection after making bets on European sovereign bonds. The news has been pressuring the financial sector as investors question whether there will be fallout from the firm's collapse. According to a New York Times report, MF Global is being investigated after federal regulators discovered that millions of dollars of customer money have "gone missing" in recent days.

In the latest earnings news, Pfizer ( PFE) reported better-than-expected adjusted earnings of 62 cents a share and raised its 2011 guidance. Shares were surging 1.6% to $$19.57 ahead of Tuesday's opening bell.

Shares of Credit Suisse ( CS) were falling 8.7% to $26.44 in premarket trading after the Swiss bank missed analysts' profit projections with third-quarter earnings of 683 million Swiss francs ($769 million). The company also announced it will reorganize its securities division and cut another 1,500 jobs. The reductions are in addition to the 2,000 job cuts that Credit Suisse announced in July.

Sirius XM Radio ( SIRI) saw its stock tumble 2.8% to $1.74 in early trading after the satellite radio company topped third-quarter profit expectations with earnings of 2 cents a share but missed revenue estimates with sales of $763 million.

Anadarko Petroleum ( APC) missed Wall Street's third-quarter profit projections by a penny with earnings of 66 cents a share. The stock was dropping 3% to $76.11 ahead of Tuesday's session.

On Tuesday, members of the Federal Open Market Committee gather for the first day of a two-day policy-setting meeting that will end with a rate decision on Wednesday afternoon.

The week also offers a look at labor market conditions with a report on company job growth from Automatic Data Processing on Wednesday and the government's October employment report on Friday. Economists are anticipating an increase of 95,000 non-farm payrolls and an additional 120,000 private payrolls. The unemployment rate is expected to hold at 9.1%.

The market will get a read on October manufacturing activity at 10 a.m. ET. The Institute for Supply Management's Purchasing Managers' Index is expected to tick up to a reading of 52 in October from September's level of 51.6.

At the same time, the Department of Commerce is expected to report that construction spending rose 0.3% in September after jumping 1.4% in August.

-- Written by Melinda Peer in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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