Nasdaq's Apple move to drag on stocks

Nasdaq futures, premarketsClick the chart for more premarket data. By CNNMoney staff


NEW YORK(CNNMoney) -- U.S. stocks are gearing up for losses at the opening bell Tuesday, as investors mull over the rebalancing of the Nasdaq-100 index to diminish Apple's influence, a rate hike in China and another downgrade of Portugal's debt.

Nasdaq Composite (COMP) futures fell 19 points, or 0.8%, ahead of the opening bell Tuesday. Dow Jones industrial average (INDU) and S&P 500 (SPX) futures were down about 0.3%. Futures measure current index values against perceived future performance.

Nasdaq OMX Group announced Tuesday it will rebalance its tech-heavy Nasdaq-100 index, reducing Apple's (AAPL, Fortune 500) weight by almost 40% -- to 12.3% from 20.5%. The change takes effect on May 2.

The change will lend more weight to Google (GOOG, Fortune 500), Intel (INTC, Fortune 500), Microsoft (MSFT, Fortune 500) and Oracle (ORCL, Fortune 500).

Apple shares fell nearly 3% in premarket trading. Microsoft, Intel and Oracle each nudged about 1% higher.

"Those investors who've got a portfolio tracking that index will need to sell Apple shares to rebalance their portfolio," said James Cordwell, digital equity analyst with Atlantic Equities in London. "Investors would have to shift from Apple to Oracle and Microsoft."

The Nasdaq-100 (NDX) includes the 100 largest nonfinancial companies listed on the Nasdaq exchange -- not to be confused with the Nasdaq Composite, which includes all of the roughly 3,000 companies listed on the exchange.

Meanwhile, Europe's debt crisis is back in focus, after Moody's Investors Service downgraded Portugal's debt to a lower investment grade rating.

Among various reasons for the change, the ratings agency cited Portugal's "uncertain political outlook," following Jose Socrates' resignation as the country's prime minister two weeks ago.

The People's Bank of China also surprised investors Tuesday by announcing a quarter percentage point hike in interest rates, as part of its continued efforts to gradually slow down the country's rapidly rising prices.

China's benchmark one-year lending rate now stands at 6.31%.

"The announcement may cause jitters about the impact tightening will have on Chinese growth. However these should not be overplayed," Mark Williams, senior China economist with Capital Economics, said in a research note. "The latest increases... are in line with the gradual policy tightening that has been underway over the last few months and will not do much to slow the economy."

Stocks closed little changed Monday, as investors took a wait-and-see approach about the economy.

World markets: European stocks fell in midday trading. Both Britain's FTSE 100 and the DAX in Germany fell 0.3%, while France's CAC 40 lost 0.6%.

Japan's Nikkei ended 1% lower. Markets in Shanghai and Hong Kong were both closed for a holiday.

Economy: At 10 a.m. ET, the Institute for Supply Management will release its monthly gauge on the service-sector index for March. Economists are looking for the index to slip slightly to 59.5, compared with last month's reading of 59.7, a level that would still indicate expansion in the sector.

Later in the day, the Federal Reserve will release minutes from its March 15 policy meeting.

Companies: KB Home (KBH) shares fell nearly 6% after the homebuilder announced a quarterly loss of $114.5 million, or $1.49 a share. That's far deeper than the loss analysts were expecting.

Shares of rival homebuilder Lennar Corp. (LEN) fell 0.5% in early trading after the announcement.

Shares of National Semiconductor (NSM) surged 71% in premarket trading. Late Monday, the company agreed to be acquired by Texas Instruments (TXN, Fortune 500) for $6.5 billion in cash. Shares of Texas Instruments fell 2.4%.

Shares of Expedia (EXPE) rose almost 5% in early trading, after American Airlines announced the two companies will resume doing business together after reaching an agreement on airfare sales.

Diamond Foods, Inc (DMND) and Procter & Gamble Company (PG, Fortune 500) announced plans to merge PG's Pringles chips business under Diamond Foods. Shares of Diamond Foods surged 7.5%, after the $2.35 billion deal was announced.

Currencies and commodities: The dollar rose against the euro and the Japanese yen, but fell against the British pound.

Crude oil for May delivery slipped 54 cents to $107.93 a barrel.

Gold futures for June delivery rose 70 cents to $1,433.70 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.42% from 3.43% late Monday.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.20%4.30%
15 yr fixed3.28%3.30%
5/1 ARM3.53%3.34%
30 yr refi4.18%4.27%
15 yr refi3.26%3.27%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,563.30 -317.06 -1.88%
Nasdaq 4,369.77 0.00 0.00%
S&P 500 1,930.67 -39.40 -2.00%
Treasuries 2.56 0.00 0.08%
Data as of 4:40am ET
Company Price Change % Change
Bank of America Corp... 15.25 -0.33 -2.12%
Micron Technology In... 30.55 -1.98 -6.09%
Apple Inc 95.60 -2.55 -2.60%
Facebook Inc 72.65 -2.03 -2.71%
Pfizer Inc 28.70 -0.56 -1.91%
Data as of Jul 31

Sections

Malaysia Airlines was in major trouble even before the twin disasters of Flight 370 and Flight 17 claimed the lives of 537 people. More

With RadioShack burning through cash, investors and credit rating agencies believe its days are numbered. More

LinkedIn shares surged in after-hours trading Thursday following strong second-quarter earnings, following the likes of Facebook and Twitter. More

Terrell White has had a profit-sharing plan for his employees since 1981, believing that if the staff isn't happy, guests won't be either. More

The Mason family, which has been struggling to pay the $100,000 student loan bill they were left with when their daughter passed away five years ago, is now seeing an outpouring of support. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.