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Stocks poised to drop

By CNNMoney.com staff


NEW YORK (CNNMoney.com) -- U.S. stocks were set to open sharply lower Tuesday, after a sharp drop in Asian shares overnight, amid concerns about the outlook for the global economy.

Dow Jones industrial average (INDU), S&P 500 and Nasdaq futures were all more than 1% lower.

Futures measure current index values against perceived future performance.

Stocks ended a choppy session slightly lower Monday after world leaders pledged to cut public deficits over the next few years and investors awaited key economic data due later in the week.

Worries that European banks won't be able to pay back the European Central Bank this Thursday as part of its €442 billion lending program are likely to drag the market even lower, said Peter Cardillo, chief market economist at Avalon Partners.

"The fear out there that the banks will scramble and won't be able to repay the ECB brings us back to the fear factor of the health of Europe and European banks," he said. "As a result, we're seeing risk aversion and more fear about the health of Europe, the global economy slowing and the domestic economy slowing."

The concerns drove investors to safer investments: the U.S. 10-year note yield fell below the critical 3% level.

World markets: Asian shares retreated Monday as investors worried about slowing economic growth.

The steepest decline was in China, where the Shanghai Composite sank 4.3%. The Hang Seng in Hong Kong finished 2.3% lower and Japan's Nikkei lost 1.3%.

Markets in Europe pulled back in morning trading. The CAC 40 in France, Germany's DAX and the FTSE 100 in Britain were all more than 2% lower.

Economy: Investors in the United States have been wary ahead of a slew of major economic readings due out this week.

Two reports are on the economic calendar Tuesday. First on tap, the Case-Shiller index of home prices in 20 cities comes out at 9 a.m. ET.

Economists surveyed by Briefing.com expect the index to have risen 3.4% in April after jumping 2.3% in March.

The Conference Board's consumer confidence index, due at 10 a.m. ET., is expected to have fallen to 62 in June from 63.3 in May.

Companies: Electric car maker Tesla Motors is scheduled to make its debut on the Nasdaq, trading under the ticker TSLA (TSLA).

The company raised more than $226 million in an IPO late Monday after pricing its shares at $17 a share.

Dollar and commodities: The dollar was higher against the euro and the British pound, but down versus the Japanese yen.

U.S. light crude oil for August delivery dropped $1.84 to $76.41 a barrel.

COMEX gold's August contract fell $1 to $1,237.60 per ounce.

Bonds: Treasury prices rose, pushing the yield on the 10-year note below the critical 3% level, to 2.98% from 3.03% late Monday. Bond prices and yields move in opposite directions. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.88%3.98%
15 yr fixed3.02%3.03%
5/1 ARM3.07%2.95%
30 yr refi3.99%4.09%
15 yr refi3.12%3.13%
Rate data provided
by Bankrate.com
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Find personalized rates:
Index Last Change % Change
Dow 17,550.69 -47.51 -0.27%
Nasdaq 5,105.55 -9.83 -0.19%
S&P 500 2,093.32 -4.72 -0.22%
Treasuries 2.21 0.06 2.84%
Data as of 6:39pm ET
Company Price Change % Change
Apple Inc 114.64 -3.80 -3.21%
Baxter International... 40.31 0.80 2.02%
Bank of America Corp... 17.80 0.03 0.17%
Baxalta Inc 37.10 3.95 11.92%
Frontier Communicati... 5.25 0.10 1.94%
Data as of 4:02pm ET

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