RTTNews - U.S. stocks were poised to open considerably weaker Monday morning in New York amid lingering doubts about the economic fundamentals and lower commodity prices. Comments by Dominique Strauss-Kahn, International Monetary Fund Chief, that the worst of the economy crisis is yet to come might pour cold water on optimism about recovery prospects.
At the conclusion of the 2-day meeting, the Finance Ministers of the G-8 nations revealed that they have initiated steps for devising adequate contingency plans that might be required to reign on rising budget deficits once the global economy shows definite signs of stabilization and signs of recovery.
As of 6.15 am ET, the S&P Futures were down 11 points, thew NASDAQ Futures were down 16 points, and the Dow Futures were down 91 points.
Asian stocks ended weak, dragged down by lower commodity prices. Hong Kong's Hang Seng Index and India's Sensex declined by more than 2%, while South Korea's Kospi ended down by over 1%. Commodity and technology stocks proved to be the undoing of the markets, as traders took profit in these shares, which were the chief beneficiaries of the recent gains.
European markets are also trading in negative territory, dragged down by resource stocks after commodities came under significant selling pressure following their recent strong run up. After opening modestly lower, the key European averages have seen further losses and are currently down over 2% each. Last Friday, the European markets had declined for the first time in four days due to weakness in the resource spaces.
Mexico-based building materials supplier Cemex, S.A.B. de C.V. said it has reached an agreement to sell its Australian operations to Switzerland-based building materials group Holcim Group for about A$2.02 billion, in an effort to save costs and reduce debt.
Financial stocks might react to reports that Citigroup, Inc. is unveiling a $1.25 billion funding tie-up with the International Finance Corp., the private sector arm of the World Bank.
Pharmaceutical stocks may see activity following reports that major companies are eyeing new and emerging markets in an effort to retain or increase their global market share.
On Friday, U.S. stocks ended mixed amid mixed economic data as traders preferred to stay away from the market ahead of the usual calm of the summer season. A consumer sentiment survey by Reuters/University of Michigan showed that the consumer sentiment index for June rose by a little less than expected, while the Labor Department's import and export prices report showed an increase in import prices for May, aided by a rise in prices of petroleum products.
Before the markets open, the New York Federal Reserve is likely to release the results of its manufacturing survey for June. The survey gives an early indication of how conditions in the sector is panning out in a particular month. After the solid 10-point improvement in May, which wasn't still good enough to suggest expansion, the general business conditions index is expected to show a modest deterioration from May levels.
The Treasury Department is due to release a report on the flows of financial instruments into and out of the U.S. for April at 9 AM ET.
Additionally, traders are also likely to get an inkling on the housing sector is faring from the National Homebuilders' Association's housing market survey, which is due out at 1 PM ET. The index has been showing an improvement for the past five months.
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