Stocks futures pointed to a lower open on Monday, as bank shares fell after an analyst initiated coverage on several large banks with an underperform or sell rating, sapping recent investor optimism on the financial sector.
Banks erased early gains after veteran banking analyst Mike Mayo of CLSA started coverage on several large banks, citing increased problem loans and the government's ability to resolve them, according to FlyOnTheWall.com.
Michael Mayo is at a new firm now and he downgraded all the bank stocks this morning -- that's certainly not a good thing, said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
The Select Sector SPDR Financial ETF
S&P 500 futures fell 6 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures slid 35 points, and Nasdaq 100 futures shed 6.25 points.
U.S. stocks capped off a 4-week winning streak on Friday, with the Dow marking its best performance on a percentage basis over that period since 1933.
Cisco shares slid 2.2 percent to $17.76 in premarket trade after Goldman Sachs cut the stock to a neutral rating and removed it from the firm's Conviction Buy list.
We're kind of long in the tooth in this rally and it's not going to take much to get tech going back down the other way at this point, it's certainly overbought too far too fast.
Shares of Sun Microsystems Inc.
(Additional reporting by Edward Krudy)
(Editing by Theodore d'Afflisio)