Stock Futures On the Retreat
NEW YORK (TheStreet) -- U.S. stock futures were drifting lower Friday with the markets uninspired by the weakness in European equities, which saw declines amid the preoccupation with Spain's soaring borrowing costs.
Futures were falling even as technology shares held momentum in premarket trading following a handful of bottom-line beats.
Futures for the Dow Jones Industrial Average were shedding 64 points, or 70.36 points below fair value, at 12,816. Futures for the S&P 500 were behind by 8.8 points or 8.61 points below fair value, at 1363, and futures for the Nasdaq 100 were dipping 8.25 points, or 5.71 points below fair value, at 2644.
The selloff in European markets was accelerating after the government of the Spanish region of Valencia requested its own bailout following the approval by eurozone finance ministers of the bailout terms for Spain's banks, which involves a package valued at up to €100 billion ($122 billion).
The approval of the deal didn't calm investors' nerves over the fate of the eurozone, with Spanish bond yields again hitting levels considered unsustainable and the 10-year remaining above 7%. Demand at a Spanish bond auction Thursday was lackluster.
The FTSE in London was slipping 0.82% and the DAX in Germany was dipping by 1.1%
"The markets still appear to be in their upward trading bands; however at the moment we're sitting right on levels of key resistance for both the Dow and Nasdaq," said Robert Pavlik, chief market strategist at Banyan Partners. "Last night the S&P 500 closed just above its key resistance level which was a slight positive. However it looks as though the line will be breached to the downside at the open this morning. Despite the fact that the markets appear as though they'll open lower today, the upward sloping trend lines remain in tact."
The major U.S. equity averages finished with mild gains Thursday up as an IBM(IBM) -led rally in technology offset a weak batch of economic data.
IBM was the standout performer on the blue-chip with a gain of nearly 4% to $195.34 after Big Blue eased past Wall Street's expectations for its latest quarter and lifted its earnings outlook.