Stock Futures Point Downward as China Sinks
NEW YORK ( TheStreet) -- Stock futures were falling, pointing to an extension of the S&P 500's steepest one-month decline in over a year on concern China's economy is sharply weakening amid liquidity concerns and the Federal Reserve plans to reduce its stimulus measures.
The Shanghai composite plummeted 5.3% on Monday, its most severe single-session drop in nearly four years as the People's Bank of China indicated the country's largest banks should limit risky loans to strengthen their balance sheets.
Futures for the S&P 500 were falling 15.75 points, or 17.13 points below fair value, to 1,568.25.
Stocks with heavy exposure to the world's second largest economy were sinking. For instance, Yum! Brands
The index has slid 2.35% so far this month and is on track for its most severe monthly retreat since May of last year. The S&P is down more than 4% from its record intraday high reached on May 21, driven by expectations that the Fed is poised to taper its bond-buying program that has helped the gauge climb more than 100% from its March 2009 lows.
Futures for the Dow Jones Industrial Average were tumbling 136 points, or 144.4 points below fair value, to 14,575. Futures for the Nasdaq were slipping 22.25 points, or 27.29 points below fair value, to 2,842.75.
The Dallas Fed general business activity index for June is expected at 10:30 a.m. EDT. The index stayed negative in May but rose five points to minus 10.5 last month.
Dallas Federal Reserve Bank President Richard Fisher at 1 p.m. is expected to speak about monetary policy in London.
The FTSE in London was falling 1.27%, while the DAX in Germany was down 1.1%. The Hong Kong Hang Seng index settled off 2.22% and the Nikkei 225 in Japan closed down 1.26%.