Stocks point lower after biggest drop in a year

[May 21, 2010]  NEW YORK (AP) -- Stock futures pointed to a lower open Friday, a day after major indexes posted their steepest drops in more than a year and pushed the market to "correction" mode.

Investors again looked to Europe for direction. The lower house of Germany's parliament approved a $1 trillion plan to help contain debt problems in Europe. Major European stock indexes fell but pulled off their lows.

The euro rose to $1.2507 from $1.2465. The 16-nation currency has been a big driver of trading for weeks.

World markets have been falling on concerns that European debt problems will upend a global rebound. The Dow Jones industrials tumbled 376 points Thursday. The Dow and broader indexes are now in correction territory by having dropped more than 10 percent from its 2010 peak last month.

Dow futures fell 30, or 0.3 percent, to 10,024. Standard & Poor's 500 index futures fell 2.70, or 0.3 percent, to 1,067.10. Nasdaq 100 index futures fell 7.75, or 0.4 percent, to 1,792.75.

Trading Friday could be volatile in part because of the expiration of options contracts.

In the U.S., the Senate late Thursday approved its version of a financial overhaul bill that contains the biggest regulatory changes for banks since the 1930s. The bill will now be reconciled with a version that passed the House.

Bond prices slipped after spiking Thursday when investors dumped anything seen as risky, including stocks and commodities. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.23 percent from 3.22 percent late Thursday.

In afternoon trading, Britain's FTSE 100 fell 0.5 percent, Germany's DAX index fell 1.6 percent, and France's CAC-40 fell 0.6 percent. Earlier, Japan's Nikkei stock average fell 2.5 percent.

[Associated Press; By TIM PARADIS]

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