Stock Futures Slump on Asia Growth Worries

NEW YORK ( TheStreet) -- U.S. stock futures were following the global markets down Monday as investor sentiment got a hit from the World Bank's lowering of growth expectations for China as well as East Asia as a whole.

The markets also kept an eye on a European finance ministers' meeting in Luxembourg on Monday and Tuesday, where a potential financial aid request from Spain and the country's harsh 2013 budget plans were expected to be the focus.

"The decision to request financial assistance rests entirely with Spain," said Michala Marcussen, head of global economics, at Societe Generale. "The longer Spain delays, however, the greater the market pressure is likely to become."

"Madrid doesn't seem set to formally request assistance at Monday's Eurogroup finance ministers' meeting," noted Mansoor Mohi-uddin, head of foreign exchange strategy at UBS Macro Research, who pointed out that Spain's Economy Minister Luis de Guindos recently said that the country "does not need a bailout at all," and that Spanish Prime Minister Mariano Rajoy said that no decision has been taken here.' A more likely venue then would be the next European Union leaders' summit on Oct. 18-19."

Futures for the Dow Jones Industrial Average were declining 48 points, or 51.15 points below fair value, at 13,488. Futures for the S&P 500 were falling 5.40 points, or 5.23 points below fair value, at 1450. Futures for the Nasdaq were falling 13 points, or 14.24 points below fair value, at 2791.

The World Bank said Monday that it reduced China's growth outlook to 7.7% this year and 8.1% next year, down from the prior estimate of 8.2% in 2012 and 8.6% in 2013, though the bank noted that it still expects a soft landing for the country. The outlook for East Asia was reduced to 7.2% this year and 7.6% next year, below the prior forecast of 7.6% in 2012 and 8% in 2013, as the regional and global economy continue to be at risk of a number of headwinds relating to the eurozone and U.S. fiscal cliff.

The FTSE 100 in London was falling 0.71% and the DAX in Germany was declining 1.21% Monday. The Hang Seng in Hong Kong closed lower by 0.89%. The Japanese market was closed for a public holiday.

November crude oil futures were down $1.18 at $88.70 a barrel. December gold futures were falling $9 to $1,771.80 an ounce.

The dollar was up 0.33%, according to the dollar index. The Treasury market was closed because of the Columbus Day holiday.

The major U.S. stock averages finished mixed Friday as weakness in technology stocks negated much of the early euphoria about a surprise decline in the unemployment rate last month. For the week though, Wall Street finished solidly in the green, getting October off to a strong start.

The U.S. economic calendar was empty Monday with state and federal offices closed for the Columbus Day holiday.

In corporate news, Wal-Mart Stores ( WMT), the world's biggest retailer, and American Express ( AXP) announced Monday the launch of the Bluebird prepaid card program as an alternative to debit and checking accounts.

UnitedHealth ( UNH) agreed to purchase 90% of Brazilian health care provider Amil Participacoes for roughly $4.3 billion.

Zynga ( ZNGA), the social gaming company, saw its shares fall 12% to $2.48 on Friday after it forecast a loss for the third quarter and lowered its full-year outlook.

Apple's ( AAPL) iPhone manufacturer in China, Foxconn, reportedly suffered a production interruption after thousands of its workers went on strike over labor conditions.

General Motors ( GM) said it and its joint ventures in China sold 244,266 vehicles in the country in September, an increase of 1.7% from last year.

AngioDynamics ( ANGO), the medical instruments maker, is expected by analysts Monday to post fiscal first-quarter earnings of 9 cents a share on revenue of $84.4 million.

--Written by Andrea Tse in New York.

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