By Polya Lesova, MarketWatch
Dec. 12, 2011, 7:28 a.m. EST
LONDON (MarketWatch) — U.S. stock futures dropped on Monday, as
investors questioned whether the measures announced by euro-zone leaders
last week would be enough to stem the sovereign-debt crisis.
Futures on the Dow Jones Industrial Average
DJ2H
-0.78%
declined 73 points to 12,070 and those on the Standard & Poor’s 500 index
SP2H
-1.04%
dropped 9.2 points to 1,243.80.
Nasdaq 100 futures
ND2H
-0.79%
fell 12.5 points to 2,306.
The blue-chip Dow index
DJIA
+1.55%
rose 1.6% on Friday after euro-zone leaders agreed to closer fiscal
ties at a Brussels summit and U.S. consumer confidence hit a six-month
high.
The initial enthusiasm over Friday’s European deal was starting to give
way to concern on Monday. Euro-zone nations committed Friday to an
inter-governmental treaty that will make tougher fiscal rules binding
and will include automatic sanctions against budget sinners.
While these medium-term measures have been generally welcomed, many
analysts note that the measures fail to address the short-term problems
of high borrowing costs for heavily indebted euro-zone nations such as
Italy.
Moody’s Investors Service said Monday it still intends to revisit the
ratings of all European Union countries during the first quarter of
2012, given “the continued absence of decisive policy measures.” The
ratings company said the announcement from last week’s summit “offers
few new measures and points out that many are similar to previously
announced ones.”
A successful Italian bond auction didn’t do much to boost sentiment.
Italy’s Treasury sold 7 billion euros ($9.4 billion) of 12-month bills
on Monday. It received bids totalling €13.5 billion and the average
yield fell to 5.95% from 6.09% at a previous sale.
World markets
European stock markets posted losses, with Germany’s DAX 30 index
DX:DAX
-2.04%
down 1.5% and Italy’s FTSE MIB index
XX:FTSEMIB
-2.73%
down 2.2%.
The euro
EURUSD
-1.07%
dropped 0.8% to $1.3263. The dollar index
DXY
+0.91%
, which tracks the performance of the greenback against a basket of other major currencies, rose 0.7% to 79.149.
Gold futures came under heavy selling pressure, with the February contract
GC2G
-2.44%
down nearly $31 to $1,686 an ounce in electronic trading on Globex.
January crude-oil futures
CL2F
-1.39%
dropped $1.19 to $98.22 a barrel.
No major U.S. economic data are scheduled for release Monday.
Looking ahead, the U.S. Federal Reserve’s Federal Open Market Committee
will hold a monetary-policy meeting on Tuesday.
Polya Lesova is chief of MarketWatch’s London bureau.
