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.
Tech shares lost ground after broker downgrades and a potential merger between IBM Corp
Cisco off, Sun off and then this negative banking news, said Frank Lesh a futures analyst and broker at FuturePath Trading LLC in Chicago.
Some of that optimism from the end of last week ended quickly,
The Select Sector SPDR Financial ETF
S&P 500 futures fell 8.30 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 74 points, and Nasdaq 100 futures shed 16.25 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 2.5 percent to $17.70 in premarket trade after Goldman Sachs cut the stock to a neutral rating and removed it from the firm's Conviction Buy list.
Shares of Sun Microsystems Inc.
Economic data scheduled for Monday includes the Conference Board's Employment index for March and the Chicago Fed Midwest manufacturing index.
Earnings season is slated to begin tomorrow when Dow component Alcoa
The blended growth rate, which combines actual numbers for companies that have reported and estimates for companies yet to report stands at negative 36.6 percent for the S&P 500, according to data compiled by Thomson Reuters.
(Editing by Theodore d'Afflisio)