Wall Street set for lower open on Greece concerns
U.S. stocks were set for a lower open on Monday as a delay in emergency loans to Greece and a possible downgrade of Italy's credit rating rekindled fears about the euro zone debt crisis, pushing investors out of riskier assets.
Euro zone finance ministers delayed a decision on extending 12 billion euros ($17 billion) in emergency loans to Greece, saying Athens would first have to introduce austerity measures.
The ministers expect the money, the next tranche in a 110 billion euro bailout by the European Union and the International Monetary Fund, to be paid by mid-July. Greece needs the loans by then to avoid a debt default.
Investors had their eyes on banking stocks as financials in Europe were among the worst performers after the decision. The STOXX Europe 600 Banks index <.SX7P> was down 1.5 percent.
Adding to concerns, Moody's has threatened to cut Italy's credit ratings in the next 90 days on worries that the Greece crisis may drive interest rates higher and derail Italy's fragile economic recovery.
The 'To Do' list for Greece, the EU and the IMF is still left unchecked after the weekend meetings, said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.
Making matters worse, the underlying weakness of the global equity markets over the past month has been due to economic moderation and those fears continue in the two fastest avenues of growth, China and India.
S&P 500 futures fell 5.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures took off 48 points and Nasdaq 100 futures lost 9.75 points.
The Dow ended the week higher, managing to close just above 12,000 on Friday. The S&P 500 barely squeaked out a gain after six straight weeks of losses. The Nasdaq lost 1 percent last week and is down 1.5 percent for the year.
The uncertainty surrounding Greece has made investors wary of committing more cash to equities.
The S&P 500's 200-day moving average (1,259) remains a closely watched level this week. The index recently traded down to this support, but has failed to respond to oversold conditions, Ari Wald, equity strategist at Brown Brothers Harriman, wrote in a research note.
The S&P ended up 0.3 percent at 1,271.50 on Friday.
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(Reporting by Angela Moon; editing by Jeffrey Benkoe)
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