Stock futures fall, point to lower opening

[May 04, 2010]  NEW YORK (AP) -- Stock futures fell Tuesday as investors remain wary of European debt problems.

Investors have been conflicted in recent days, buying up stocks one day only to sell them off the next as upbeat domestic economic reports are offset by worries about debt problems overseas and a potential overhaul of financial regulation.

Debt problems in Europe are again a worry Tuesday. Investors will, however, get reports on factory orders and home sales later in the day that are expected to show the economy is improving, which could spark a rally.

European markets dropped because of ongoing worries over whether a $144 billion bailout package for Greece will be approved by other the 15 other European Union members that would foot much of the bill. The cost of the Greek bailout package could make it harder for the EU to rescue other countries that might face similar debt woes.

The euro again fell against the dollar as traders avoid the currency used by 16 EU members, including Greece. The euro hit its lowest level in a year. A stronger dollar would cut into profits for U.S. companies that heavily rely on foreign operations.

Britain's main index was dragged down by BP PLC. Investors are concerned about the costs the oil company will face from an oil spill in the Gulf of Mexico.

Ahead of the opening bell, Dow Jones industrial average futures fell 72, or 0.7 percent, to 11,030. Standard & Poor's 500 index futures fell 9.30, or 0.8 percent, to 1,189.30, while Nasdaq 100 index futures dropped 15.00, or 0.7 percent, to 2,012.00.

A Commerce Department is expected to show factory orders fell in March because of a drop in commercial aircraft orders. Economists polled by Thomson Reuters, on average, forecast orders fell 0.1 percent in March.

Excluding the volatile transportation sector orders likely rose by 2.8 percent, the biggest gain since December 2007.

The manufacturing sector has consistently improved in recent months, boosting confidence in a recovery. Stocks rallied Monday, in part, due to a strong report on the manufacturing sector from the Institute for Supply Management.

Separately, the National Association of Realtors' pending home sales index likely jumped to 101.5 in March from 97.6 a month earlier. The index likely received a boost as home buyers rushed in recent months to cash in on a tax credit that expired last week.

A collapse of the housing market helped push the economy into recession late in 2007 and has been slow to recover.

Both reports are due out at 10 a.m. EDT.

Major indexes surged Monday after a fresh round of upbeat economic reports buoyed investors' expectations for a recovery. New reports showed consumer spending and manufacturing continued to improve. The Dow jumped 143 points.

Meanwhile, bond prices rose Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.66 percent from 3.69 percent late Monday.

The dollar rose against other major currencies. Gold also rose, while oil fell.

Overseas, Britain's FTSE 100 fell 1.1 percent, Germany's DAX index dropped 0.7 percent, and France's CAC-40 tumbled 1.9 percent.

[Associated Press; By STEPHEN BERNARD]

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