Stock futures hit geopolitical snag

NEW YORK (CNNMoney.com) -- Stock futures were lower Monday following threats from Russia to train its missiles on targets in Europe and another slide in the Chinese stocks over continued tax concerns.

Stock futures were down in early trading, pointing to a lower open. Both the Dow and the S&P 500 closed at fresh record highs Friday following a string of solid economic reports.

International news was in focus Monday, although global reaction was mixed.

Major markets in Europe fell with the European autos sector leading the declines and partly due to Russian President Vladimir Putin's tough talk. As the G8 summit gets underway this week, Putin said Russia would aim missiles at targets in Europe if the U.S. went forward with plans to station a missile defense system on the continent.

Markets in Asia brushed off an 8 percent tumble in Chinese shares on continued worries over an investment tax meant to curb the red-hot economy. Markets in both Japan and Hong Kong traded higher.

In corporate news, Palm Inc. (Charts) said it would sell a 25 percent stake to private equity firm Elevation Partners for $325 million as part of a larger $940 million restructuring effort as the firm faces increased competition from smart phones, according to the Wall Street Journal Online.

The Journal also reports that private equity firms TPG and Silver Lake Partners are close to buying telecommunications equipment maker Avaya (Charts, Fortune 500) for $17 per share.

And in further deal news, Cadence Design Systems, a maker of microchip design software, is in talks with Kohlberg Kravis Roberts and The Blackstone Group for a possible buyout, according to an article in the New York Times.

Apple (Charts, Fortune 500) said it will start selling its $500-plus iPhone June 29, with investors watching to see if the company can replicate its success with Mac computers and the iPod in the mobile phone arena.

And media magnet Rupert Murdoch has agreed to greater editorial independence for Dow Jones & Co. (Charts) Inc as he attempts to buy the news outlet, although he won't let the Bancroft family retain editorial control, the Wall Street Journal reported.

Oil prices rose. U.S. light crude gained 63 cents to $64.64 a barrel in early electronic trading.

Treasury prices were little changed, leaving the yield on the 10-year note at 4.95 percent. Bonds yields soared Friday following a strong jobs report that damped hopes of an interest rate cut.

The dollar higher against the euro and little changed on the yen.