RTTNews - The major European markets are likely to open lower on Wednesday on the back weak Wall Street and Asian cues amid concerns about the need for more stimulus funding and weaker commodity prices.
On Wall Street, the major U.S. averages finished sharply lower, as traders did some profit taking due to a lack of significant economic data to drive trading. Aside from the earnings data on tap for the second half of the week, traders also looked forward to a series of economic reports on employment, international trade and consumer sentiment, with expectations deflated following disheartening employment data last week.
According to the American Bankers Association, delinquencies on home-equity loans climbed to 3.52 percent from 3.03 percent in the fourth quarter of 2008, and late payments on the loans climbed to a record 1.89 percent. While the Dow Jones Industrial Average ended the session down nearly 2%, more than offsetting the gain posted in the previous session and finishing the day at a two-month closing low, the Nasdaq Composite fell 2.3% and the S&P 500 index shed 2%.
Crude oil futures tumbled more than $1 to below $63 a barrel in New york trading on Tuesday on deep concerns about energy demand after reports that the wold's top oil consumer may need to work out additional stimulus measures to prop up the economy implied that recovery is still far off. In Asian trading on Wednesday, crude oil was last trading at $62.17 a barrel, down 1.21% amid rising concerns that a recovery from the worldwide recession was unlikely to happen soon.
An index measuring consumer confidence in the United Kingdom was up four points in June to 58, the Nationwide Building Society said on Wednesday. Analysts had been predicting a score of 55 following the May reading, which had been revised up from 53 to 54. The outlook index climbed to 86 in June from 78 in May. The percentage of people who believe economic conditions will improve in the next six months climbed to 33 percent, up from 28 percent. Conversely, only 23 percent expect conditions to worsen in six months.
Switzerland's seasonally adjusted jobless rate rose to 3.8% in June from 3.5% recorded in May, the State Secretariat for Economic Affairs said Wednesday. That was more than the expected rate of 3.6%. The adjusted number of unemployed in June rose 5,125 from May to 140,253. Separately, Germany's Federal Statistical Office announced that the total number of insolvencies decreased 3.4% year-over-year to 13,676 in April
The Bank of France is expected to announce its business sentiment index for the month of June at 2.30 am. ET. The index is projected to rise to 84 in June from 81 in May. The Eurostat is likely to confirm euro area's economic contraction in the first quarter at 5.00 am. ET.
In corporate news, British Land and Vedanta Resources will go ex-dividend on Wednesday. Yemenia Airways may cancel a $2 billion Airbus order after the plane maker showed no support since the crash and jumped to conclusions, the carrier's chairman said Tuesday.
German financial services firm Deutsche Bank AG has hired advisers to its wealth management operations from UBS AG and Morgan Stanley, according to media reports released on Tuesday. Michael Queen, 3i Group plc's Chief Executive, said that the company has significantly enhanced its ability to take full advantage of improved conditions as they emerge.
Marks & Spencer boss Sir Stuart Rose, who wants to continue as the chairman until his retirement in July 2011, will face a showdown with its private and institutional shareholders at the retailer's AGM on Wednesday.
In his speech to the House of Commons, British finance minister Alistair Darling is set to ask banks for disaster recovery plans.
Meanwhile, despite a better-than-expected German's factory orders report, the European markets fell for the fourth day on Tuesday, as energy stocks slumped after crude oil prices tumbled and traders remained worried about the pace of global economic recovery. The FTSEurofirst 300 index of pan-European blue chips closed 0.80% lower, while the narrower DJ Stoxx 50 index fell 0.72%. Around Europe, the U.K.'s FTSE 100 index fell 0.19%, France's CAC 40 index declined 1.09% and Germany's DAX index dropped 1.15%.
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