Stock Futures Fall as Greek Talks Drag On
NEW YORK ( TheStreet) -- U.S. stock futures were sliding Thursday as Greek faced an increasing time crunch for securing a second bailout package from its European partners and the International Monetary Fund.
Futures for the Dow Jones Industrial Average were declining 42 points, or 32.9 points below fair value, at 12,721. Futures for the S&P 500 were down 6.6 points, or 5.1 points below fair value, at 1335. Futures for the Nasdaq were down 6.5 points, or 4.5 points below fair value, at 2551.
Stocks closed lower Wednesday as reports that Greece's creditors were delaying the country's bailout eclipsed news that China may provide financial support to the eurozone.
As a March 20 deadline for repaying its debt quickly approaches, Greece must convince its German-led European partners that it will carry out conditions necessary for receiving its second bailout package of €130 billion. The country urgently needs this and a €100-billion write-down on privately held sovereign debt to prevent a massive default that could rock the global financial markets.
European partners continue to express skepticism about Greece's ability to fulfill deal requirements as it had backpedaled on promises in the past. While Athens hopes that it can eradicate doubts by the next meeting of eurozone finance ministers on Monday, there have been suggestions of finding ways to hold off on the complete delivery of the bailout until after Greece's early elections in April, while at the same time avoiding a chaotic default.
Greek finance minister Evangelos Venizelos meanwhile indicated that a €325-million gap in Greece's budget this year can be plugged.
The euro had fallen to a three-week low against the dollar as talks dragged on.
As the eurozone continues to fight its debt crisis, Moody's warns that it may cut the credit ratings of 17 global and 114 European financial institutions. The credit ratings of Morgan Stanley (MS) , UBS(UBS) and Credit Suisse (CS) could be cut three notches by Moody's because of the risks associated with the eurozone debt crisis.
Germany's DAX was siding 1% while London's FTSE was falling 0.69%. Japan's Nikkei Average settled down 0.24% and Hong Kong's Hang Seng closed lower by 0.41%.
U.S. economic releases on Thursday includes weekly initial and continuing jobless claims at 8:30 a.m. EST; housing starts and building permits for January at 8:30 a.m.; the producer price index for January at 8:30 a.m.; and the Philadelphia Fed regional manufacturing activity survey for February at 10 a.m.
The Commerce Department is expected to report that housing starts climbed 2% to a 670,000 annual rate after dropping 4.1% in December, while initial jobless claims are expected to spike to 365,000 after falling to 358,000 last week.
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