Stocks set to ease ahead of Slovakia vote, Alcoa

October 11, 2011: 8:13 AM ET
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NEW YORK (CNNMoney) -- U.S. stocks were headed for a lower open Tuesday as investors await Slovakia's vote to expand the European bailout fund and the first corporate results of the third quarter.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures fell between 0.1% and 0.4% ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Europe's debt crisis remained in focus as investors awaited the outcome of the Slovakian parliament's vote to expand the European Financial Stability Fund (EFSF) -- essentially a bailout fund for the region's most troubled nations.

The expansion must be ratified by all 17 eurozone nations, and Slovakia is the last country to vote.

"A 'yes' vote is not a done deal, and if Slovakia do not ratify EFSF enhancements then it is feasible that the whole deal will collapse," said Marc Chandler, global head of currency trading at Brown Brothers Harriman, in a note to clients.

Meanwhile, European leaders said Greece will get the next installment from last year's €110 billion bailout, worth €8 billion, in early November.

Trading has been choppy in recent weeks, as investor sentiment has swung between optimism and fear over whether European leaders will find a solution to the worsening debt crisis.

Stocks: The bears are back

On Monday, U.S. stocks rallied more than 2%, as investors cheered a pledge from European leaders to unveil a plan for solving the eurozone's debt crisis by the end of the month.

But the lack of details about the plan and uncertainty about Slovakia's vote rekindled investor anxiety.

Nerves were also high as third-quarter financial results were set to pour in, beginning with Dow component Alcoa after the closing bell.

World markets: European stocks slid in afternoon trading. Britain's FTSE 100 (UKX) and France's CAC 40 (CAC40) dropped 0.7%. The DAX (DAX) in Germany lost 0.1%.

Asian markets ended higher. The Shanghai Composite (SHCOMP) rose 0.2%, the Hang Seng (HSI) in Hong Kong jumped 2.4%, and Japan's Nikkei (N225) gained 2%.

Markets were reacting to Monday's news that China's sovereign wealth fund's investment arm purchased shares of four state-owned banks: Agricultural Bank of China, Industrial & Commercial Bank of China, Bank of China and China Construction Bank.

Companies: Aluminum maker Alcoa (AA, Fortune 500) delivers quarterly results after the closing bell Tuesday. Analysts expect earnings per share to more than double, as revenue edges up 18%, according to Thomson Reuters.

Overall, S&P 500 company earnings are expected to have climbed almost 13% in the third quarter of 2011, according to earnings tracker Thomson Reuters. Revenues of the companies in the benchmark index are expected to have risen 10%.

Volcker rule raises more questions

The Federal Deposit Insurance Corp. is expected to release a draft of the Volcker Rule, which intends to take risky bets out of the financial system in hopes of preventing another crisis. The rule aims to rein in how banks use their own accounts to chase profits -- so-called proprietary trading.

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

Oil for November delivery slipped 48 cents to $84.93 a barrel.

Gold futures for December delivery fell $5.80 to $1,665 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.15% from 2.07% late Friday.

The bond market was closed Monday for Columbus Day.  To top of page

Index Last Change % Change
Dow 16,939.82 20.23 0.12%
Nasdaq 4,525.52 -1.99 -0.04%
S&P 500 1,982.37 0.77 0.04%
Treasuries 2.42 0.01 0.50%
Data as of 10:52am ET
Company Price Change % Change
Apple Inc 100.12 -0.41 -0.41%
Bank of America Corp... 15.48 0.03 0.19%
Staples Inc 11.26 -0.36 -3.10%
Lowe's Companies Inc... 51.41 -0.11 -0.21%
General Electric Co 26.22 0.17 0.65%
Data as of 10:37am ET
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15 yr fixed3.21%3.17%
5/1 ARM3.56%3.21%
30 yr refi4.14%4.37%
15 yr refi3.13%3.17%
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