Howard Wheeldon Comments: Futures Point to Red Open - Fox Business Network Online
U.S. markets were looking to start Tuesday's session deep in the red following a massive selloff in China overnight and continuing worries over Ireland's sovereign debt situation. As of 8:45 a.m. in New York, the Dow Jones Industrial Average futures dropped 56 points to 11117, the S&P 500 futures were down 5.9 points to 1189.90 and the Nasdaq 100 futures fell 14.50 points to 2113.50.
China's Shanghai Composite dropped nearly 4% overnight after the Chinese Government announced new limits for foreigners to invest in commercial property within the growing Asian economy. Speculation that China may raise interest rates to combat inflation also weighed on the market.
It was the second major drop in Chinese equities in less than a week.s In Hong Kong, the Hang Seng also fell 1.4% overnight in response to what happened on the mainland.
In Europe, stocks were also lower on reports that Irish government officials are resistant to accepting a EU-sponsored bailout, despite the fact that multiple market indicators show investors have no confidence in Ireland to turn its ship around on its own. According to the BBC, Ireland's chief European affairs minister told reporters "there is no reason" for Ireland to need financial assistance and that the markets "are not reacting particularly rationally."
"Markets have rightly decided that sitting on a failed banking system with so much inherent debt and deficit means Ireland cannot be allowed to handle its woes alone," said Howard Wheeldon, senior strategist with BGC Partners in London, in an e-mail.
U.S. markets will have several retail-related earnings reports to work through, including results from Wal-Mart (WMT) and Home Depot (HD) - both Dow components. Shares of Home Depot were up 0.5% in pre-market trading following the company reporting earnings of 51 cents per share on $16.6 billion in sales, well ahead of the 48 cents per share analysts were looking for. Wal-Mart also reported better-than-expected results, saying it earned 95 cents per share last quarter on $101 billion in sales. Analysts were looking for earnings of 90 cents per share, according to Thomson Reuters.
Commodities were sharply lower following the concerns out of Asia, oil fell 1.5% to $83.64 a barrel and gold was down 0.8% to $1357.50 a troy ounce. Copper was down nearly 2%. Company News
Apple (AAPL) is reportedly set to announce today that it has reached an agreement with The Beatles to begin selling their music on iTunes. The announcement ends a multi-year effort by CEO Steve Jobs to get the iconic rock group onto the world's largest online music store.
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