NEW YORK, July 1 (Reuters) - U.S. stock futures on Tuesday pointed to a sharply lower market open, weighed down by climbing oil prices and investor wariness of over a slump in financial stocks in Europe.
Wall Street was poised for a rocky start after the Dow finished flat on Monday but suffered its worst first-half of the year since 1970 as record oil prices, a persistent credit crisis and sluggish profit growth battered global equity markets.
Adding to inflation fears, U.S. crude oil futures <CLc1> rose about $2 to $141.89 a barrel on Tuesday due to the dollar's weakness and concerns for interruptions of the main Gulf oil shipping route as geopolitical tensions involving Iran grow.
Presaging a rocky ride for U.S. brokerages, shares of Merrill Lynch & Co Inc <MER.N>, the world's largest brokerage, fell 1.8 percent in European trade while rival Morgan Stanley <MS.N> fell 2.5 percent.
European financial stocks fell on Tuesday to their lowest since June 2003. Among the worst hit was UBS <UBSN.VX>, which fell 6 percent to 10-year lows. UBS has been a major casualty of write-downs from U.S. mortgage-related investments.
'Financials are weak in Europe, and investors are continuing to eye the weakness,' said Peter Cardillo, chief market economist at Avalon Partners.
He cited oil's climb as another concern weighing on the market.
S&P 500 futures <SPc1> were 13.6 points lower, well below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures <DJc1> fell 105 points, and Nasdaq 100 <NDc1> futures fell 25.75 points.
U.S. economic data on tap on Tuesday includes the Institute for Supply Management's manufacturing activity index for June, due at 10 a.m. (1400 GMT).
Also due later in the session are automakers' U.S. sales figures for June, which are likely to cast the spotlight on the continuing troubles of U.S. carmakers.
Stock markets in Asia fell on Tuesday as soaring oil and food prices added to worry about stagflation fears. In Europe the FTSEurofirst 300 index of top European shares <.FTEU3> was down 2.5 percent.
On a positive note, shares of commercial lender CIT Group Inc <CIT.N> rose more than 11 percent to $7.60 before the opening bell after the company said it agreed to sell its home lending business and other housing portfolio holdings.
On Monday, the Dow Jones industrial average <.DJI> gained 3.50 points, or 0.03 percent, to end at 11,350.01. The Standard & Poor's 500 Index <.SPX> was up 1.62 points, or 0.13 percent, at 1,280.00. The Nasdaq composite index <.IXIC> was down 22.65 points, or 0.98 percent, at 2,292.98.
(Editing by Kenneth Barry)
((walker.simon@thomsonreuters.com; +1 646 223 6231; Reuters Messaging:rm://walker.simon.reuters.com@reuters.net)) Keywords: MARKETS STOCKS tf.TFN-Europe_newsdesk@thomsonreuters.com slj COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Wall Street was poised for a rocky start after the Dow finished flat on Monday but suffered its worst first-half of the year since 1970 as record oil prices, a persistent credit crisis and sluggish profit growth battered global equity markets.
Adding to inflation fears, U.S. crude oil futures <CLc1> rose about $2 to $141.89 a barrel on Tuesday due to the dollar's weakness and concerns for interruptions of the main Gulf oil shipping route as geopolitical tensions involving Iran grow.
Presaging a rocky ride for U.S. brokerages, shares of Merrill Lynch & Co Inc <MER.N>, the world's largest brokerage, fell 1.8 percent in European trade while rival Morgan Stanley <MS.N> fell 2.5 percent.
European financial stocks fell on Tuesday to their lowest since June 2003. Among the worst hit was UBS <UBSN.VX>, which fell 6 percent to 10-year lows. UBS has been a major casualty of write-downs from U.S. mortgage-related investments.
'Financials are weak in Europe, and investors are continuing to eye the weakness,' said Peter Cardillo, chief market economist at Avalon Partners.
He cited oil's climb as another concern weighing on the market.
S&P 500 futures <SPc1> were 13.6 points lower, well below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures <DJc1> fell 105 points, and Nasdaq 100 <NDc1> futures fell 25.75 points.
U.S. economic data on tap on Tuesday includes the Institute for Supply Management's manufacturing activity index for June, due at 10 a.m. (1400 GMT).
Also due later in the session are automakers' U.S. sales figures for June, which are likely to cast the spotlight on the continuing troubles of U.S. carmakers.
Stock markets in Asia fell on Tuesday as soaring oil and food prices added to worry about stagflation fears. In Europe the FTSEurofirst 300 index of top European shares <.FTEU3> was down 2.5 percent.
On a positive note, shares of commercial lender CIT Group Inc <CIT.N> rose more than 11 percent to $7.60 before the opening bell after the company said it agreed to sell its home lending business and other housing portfolio holdings.
On Monday, the Dow Jones industrial average <.DJI> gained 3.50 points, or 0.03 percent, to end at 11,350.01. The Standard & Poor's 500 Index <.SPX> was up 1.62 points, or 0.13 percent, at 1,280.00. The Nasdaq composite index <.IXIC> was down 22.65 points, or 0.98 percent, at 2,292.98.
(Editing by Kenneth Barry)
((walker.simon@thomsonreuters.com; +1 646 223 6231; Reuters Messaging:rm://walker.simon.reuters.com@reuters.net)) Keywords: MARKETS STOCKS tf.TFN-Europe_newsdesk@thomsonreuters.com slj COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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