Wall Street set for lower open as Greece worries linger

By IBTimes Staff Reporter | May 04 2010 9:24 AM

U.S. stocks were set for a sharply lower open on Tuesday as Greece's debt problems continued to rattle investors and after a broad rally in the previous session that took the S&P 500 to its biggest day in two months.

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Striking public workers in Greece challenged their government's bailout-for-austerity deal with the European Union and the International Monetary Fund as investors worried about Athens' ability to enforce deeper spending cuts.

It looks like we've got a bit of caution ahead of data in here and some skepticism about Greece, said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

S&P 500 futures were down 12 points and 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 fell 87 points, while Nasdaq 100 futures dipped 22.5 points.

Futures extended losses after a security alert was issued for a London subway station, but London Police later reopened the Aldgate East station on the edge of the financial district.

Drugmakers will be in view after both Merck & Co Inc and Pfizer Inc reported better-than-expected first-quarter profits.

Pfizer shares were up 2 percent at $17.27, and Merck shares were up 1.2 percent at $35.70 in premarket trade.

U.S. March factory orders, to be released by the Commerce Department at 10 a.m. EDT, top the list of economic data. Economists in a Reuters survey expect a month-over-month drop of 0.1 percent, compared with an 0.6 percent rise in February.

Also at 10 a.m., the National Association of Realtors will release figures for March pending home sales. Economists expect a rise of 4.0 percent rise month over month, versus an increase of 8.2 percent in February.

The financial sector will be in view as the U.S. Senate is set to cast its first votes on a sweeping Wall Street reform bill, with passage of a handful of uncontroversial amendments expected and a key procedural question still unsettled.

Energy shares may be in play as the massive oil spill in the Gulf of Mexico worsens, and BP Plc said it made progress toward capping the underwater well that ruptured almost two weeks ago.

Silver Lake and Warburg Pincus will buy Interactive Data Corp , the financial data provider, for $3.4 billion in cash. IDC shares rose 0.7 percent to $33.23 in premarket trade.

U.S. stocks staged a broad rally that drove the S&P 500 to its best day in two months on Monday after manufacturing, consumer spending and construction data instilled confidence that the economic recovery is gaining traction.

(Reporting by Angela Moon; Editing by Padraic Cassidy)