Market Poised to Give Back Some Gains
U.S. stock index futures pointed to a lower open for Wall Street Monday after stocks logged their best five-day streak in 75 years last week, ahead of a week packed with data and economic policy decisions.
The major indexes indicated drops approaching 2 percent.
"The market is really spooked I'm afraid," Joseph Poon, head of Macquarie Private Wealth Asia, told CNBC.
"We just have to see some stability… the US consumer is usually the guy that's going to pull us back," Poon added.
But the outlook is bleak for the retail industry, despite the weekend rush of shoppers which left oneWal-Martemployee dead.
Early results from the Black Friday weekend showed that sales grew both in stores and online, fueled by repeat trips, heavier Web sales and deep discounts from retailers. But momentum is likely to drop sharply in the coming weeks and stores may need to offer even more aggressive discounts, analysts said.
Worse news looks set for consumer and credit markets, as the credit-card industry may pull back more than $2 trillion of lines of credit over the next year-and-a-half due to risk aversion and regulatory changes, Oppenheimer & Co. banking analyst Meredith Whitney said in a research note.
With the big economic news slated for later in the week, the market was looking for other signals on how to proceed Monday.
Johnson & Johnson shares dropped premarket after the company announced it was acquiring surgical products manufacturer Mentor for $1.07 billion or $31 a share, a nearly 100 percent premium on the company's Friday closing price. Mentor shares surged more than 85 percent in premarket trading.
In other corporate news, Spanish builder Sacyr Vallehermososold its Itinere highway business to aCitigroup infrastructure fund for 7.887 billion euros ($10.20 billion), cutting its debt pile by a third.
The board of General Motors met Sunday to review a restructuring plan intended to cut costs and win support for up to $12 billion in emergency funding from the U.S. government, according to Reuters.
GM is due to present a viability plan to Congress Tuesday. Investors weren't optimistic about the outcome, with shares tumbling more than 16 percent in premarket trade.
And sources inside Yahoo and Microsoft told CNBC a deal in which Microsoft would by Yahoo's search division was not imminent, despite a report in the Sunday Times that claimed the two were nearing an agreement on the issue.
Yahoo shares rose 5 percent premarket, while Microsoft fell 1.4 percent.
On the economic front, construction spending data for October are due at 10 am New York time and expenditures are expected to have fallen 0.9 percent versus a fall of 0.3 percent in September, according to Briefing.com.
The Institute for Supply Management's index will also be released at 10 and is expected to have sunk even more to 38 in November from October's 38.9.
Asian stocks closed mixed, with the Nikkei down 1.35 percent but the Shanghai Composite up 1.25 percent.
In Europe, last week's rally fizzled as well and stocks were lower, with banks and commodities stocks leading overall markets down.