US Stock Futures Down On Europe Concerns, Wal-Mart Drops

By IBTimes Staff Reporter | April 23 2012 8:00 AM

(REUTERS) -- Stock index futures were sharply lower on Monday as political uncertainty in Europe raised new questions about how effectively the region would tackle its sovereign debt crisis.

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The Netherlands government failed to agree on budget cuts over the weekend, making elections in the core euro zone member almost unavoidable. The developments cast doubt on the country's support for future euro zone measures.

German manufacturing shrank at its fastest pace in nearly three years in April, denting hopes it can drive growth in the euro zone.

The first round of the French presidential election added to the uncertainty after anti-immigration crusader Marine Le Pen scored a record first-round score, jolting the race between Socialist front-runner Francois Hollande and incumbent Nicolas Sarkozy.

Europe's debt crisis has been a major headwind for U.S. equities as investors worry it may affect growth and corporate profits. While the S&P snapped a two-week string of losses last week, it remains down 2.9 percent from a closing high in early April.

Wal-Mart Stores Inc shares dropped 2.3 percent to $60.99 in premarket trading after the New York Times reported officials at the retailer stymied an internal investigation into allegations of extensive bribery at its Mexican subsidiary.

S&P 500 futures fell 14.3 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 lost 121 points, and Nasdaq 100 futures sank 26.25 points.

Kellogg Co fell 4.6 percent to $51.50 in light premarket trading after the cereal maker cut its full-year profit view.

Xerox Corp reported a profit that fell from the prior year.

Shares of D.R. Horton Inc rose 3.4 percent to $15.90 premarket after the homebuilder reported its second-quarter results and said profitability in the second half of the year would be stronger.

Earnings season continues in full force, with ConocoPhillips and Texas Instruments Inc also on tap today.

So far, earnings have been strong, with more than 80 percent of S&P 500 companies topping consensus profit forecasts.

Stocks mostly rose on Friday, led by solid earnings from McDonald's, General Electric and Microsoft, but declines in banks and technology shares pulled indexes from their highs of the day.

(Editing by Jeffrey Benkoe)