Stock Futures Lower As Greek Wait Continues

Published February 7, 2012 2:18PM (EST)

NEW YORK (AP) — U.S. stock futures edged lower Tuesday morning as talks dragged on in Greece on terms of a second bailout to prevent a bankruptcy.

Dow Jones industrial futures were down 7 points to 12,769. The broader S&P 500 futures fell 3 points to 1,336. The Nasdaq composite fell 6 points to 2,520.

With much of Greece coming to a standstill due to a general strike called against impending cutbacks, markets will be monitoring political leaders' talks in Athens. Heads of the three parties backing the interim government will try to thrash out a deal on new austerity measures needed to get bailout cash.

They will confer with Prime Minister Lucas Papademos on new income cuts and job losses, which Greece's eurozone partners and the International Monetary Fund are demanding to keep the country's rescue loans flowing. With a general election scheduled to take place within a few months, political leaders are fretting about the impact on their fortunes of signing up to a deal that imposes more hardship on Greece's population.

The U.S. futures mirrored declining markets in the rest of the world.

In Europe, the FTSE 100 index of leading British shares was down 0.2 percent at 5,878 while Germany's DAX fell 0.7 percent to 6,716. The CAC-40 in France was 0.4 percent lower at 3,392.

European corporate news was more upbeat, not least the confirmation that mining company Xstrata PLC and commodities dealer Glencore International PLC agreed a deal that will create a company with a combined capitalization of $90 billion and the world's fourth largest natural resources company. The announcement of the terms of the deal comes just a few days after the revelation that the two companies were in discussions about a tie-up.

Xstrata shares were down nearly 2 percent as investors had hoped the premium would be a little higher than the 15.2 percent that's on offer.

BP PLC shares were flat even after it raised its quarterly dividend by 14 percent after posting double-digit gains in profit and revenue in the last three months of 2011 despite further big payments to compensate for a disastrous oil spill in the Gulf of Mexico.

Steel maker ArcelorMittal SA was faring better after voicing some cautious optimism about its near-term —prospects even after it reported a heavy fourth quarter loss generated by a deteriorating European economy and big tax and restructuring charges.

Earlier in Asia, most markets fell.

In mainland China, the benchmark Shanghai Composite Index fell 1.7 percent to 2,291.90 while the smaller Shenzhen Composite Index lost 1.7 percent to 869.87. Japan's Nikkei index fell 0.1 percent to 8,917.52 while Hong Kong's Hang Seng Index dropped the same rate to 20,699.19.

By Salon Staff

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