In the Headlines
Early Tuesday, stock futures couldn't maintain the upward momentum that sent Wall Street to a higher finish Monday. Worries about Europe persisted ahead of today's open, following the disappointing results of an Italian bond auction. Rumors that China would step in to buy Italy's debt sent U.S. stocks higher late in Monday's session, but optimism about a China rescue fizzled overnight.
The NYSE and Nasdaq futures indicated a lower open Tuesday.
European indices were trading in the red before the Wall Street opening bell, as investors and traders continued to fret that Moody's may downgrade French banks. The French and German presidents are expected to release a statement today about the Greek debt problem. However, France is denying that any statement will be forthcoming today.
Wall Street futures moved off earlier lows on this news. In Asia, indices closed mostly lower on European concerns Tuesday, though Japan's Nikkei gained 0.93%. Manufacturers and semiconductor makers helped propel the index into positive territory.
Stateside, the pace of economic data picks up today, though the big attention-grabbing reports are set for later in the week. The National Federation of Independent Business said its monthly small-business optimism index fell 1.8 points in August, its sixth drop in a row. At 8:30 a.m. EDT, the Labor Department will release August import/export prices. Economists expect the import numbers to show a decline, spurred by a drop in petroleum prices. Export prices are also seen declining, but at a rate smaller than July's 0.4% drop.
At 2 p.m., the Treasury Department is scheduled to release the federal budget data for August. Despite ongoing debates among politicians and in the media about government spending, this report does not typically get much attention from traders.
Gold rose $14.70 per ounce to $1,828 in early trading. Meanwhile, crude oil rose $1.45 per barrel to $89.64. The move came despite a cut in demand forecast from the International Energy Agency (IEA), which said it anticipates lower worldwide demand. The IEA's move follows a similar forecast from OPEC yesterday.
Early Tuesday, the yield on the 10-year Treasury note had remained below 2%, at 1.93%.
There is not much in the way of earnings news today, although S&P 500 component Best Buy (BBY) is due out with second-quarter earnings before the bell. The big-box electronics retailer is expected to report income of $0.53 per share on revenue of $11.53 billion.
September marks the ninth of the past 11 months that Best Buy has traded to the downside. The shares have posted a year-to-date loss of 27.21% on tepid sales and earnings numbers in recent quarters.
Early price movers included Oracle (ORCL), falling $0.24, 0.90%, to $26.51 following news that SAP (SAP) would pay Oracle $20 million to settle allegations of illegal software downloads. SAP fell $1.86, 3.78%, to $47.29 in premarket trade.
Monsanto (MON) gained $0.29, 0.44%, to $66.16 before the bell. The company said it would raise corn seed prices in 2012. Shares are trading below key moving averages, but Wall Street expects double-digit earnings growth in the next two years.
Netflix (NFLX) fell $0.80, 0.38%, to $209.25 following Susquehanna's initiation of coverage with a rating of Neutral. Shares tumbled 11.6% in August and are down 10.6% so far this month.
MGM Resorts (MGM) received an upgrade from Brean Murray, which boosted the hotel and casino operator to Buy from Hold. Brean Murray cited U.S. revenue trends and share price valuation in its move. MGM climbed $0.18, 1.74%, to $10.50 following the upgrade.