Futures Drift Lower Amid Greece Troubles
The US stock market could be in for another rough day as investors grew nervous over uncertainty in the European debt crisis.
A handful of early events rattled markets: Among them the European Central Bank's decision to keep its key interest rate unchanged while offering no intervention for the current problems, and ECB President Jean-Claude Trichet's warnings of more economic troublesand the possibility that bank balance sheets might have to shrink.
Stock futures pointed to a slightly negative open after looking a bit positive earlier.
The Dow and the S&P 500 have suffered their biggest two-day declines since Feb. 3-4, while the Nasdaq saw its biggest two-day decline since August of 2009 on Tuesday and Wednesday. Market gains for the year have been cut to about 4 percent across the board.
Closer to home, the government said jobless claims dropped to 444,000 this week, a slight drop from last week but not as much as hoped. Productivity rose 3.6 percentin the first quarter, better than expected, but well off the pace from the previous quarter.
Markets reacted little to the data, focusing instead on the continued Greek uncertainty.
Sales reports from major retailerssuch as Costco and Wal-Mart were mostly disappointing, with six of nine companies falling below expectations. Costco shares slipped 1.5 percent in premarket trading while Wal-Mart edged lower as well.
Asian markets ended lower Thursday on the back of the crisis, but European shares managed to pull higher after a shaky start.
Concerns over Greek debt and news of a potential ratings downgrade for Portugal have added to global stock declines, but one market expert thinks investors shouldn't make snap decisions.
"Yes, it's front page headlines for a European issue and that's basically what it is. It's a European issue and Europe has to sort it out," Stuart Shrimpton, director of Intelligent Investments, told CNBC.
"It's not a time to panic sell and get out of any sort of stocks and shares that you're in at the moment because you think it’s a worldwide contagion," Shrimpton added.
Former Treasury Secretary Henry Paulson and current Treasury Secretary Tim Geithner are the star witnesses this morning before the Financial Crisis Inquiry Commission. It's a busy morning for notable speakers in addition to Paulson and Geithner: Fed Chairman Ben Bernanke speaks at a Chicago Fed event at 9:30 am, with Chicago Fed President Charles Evans also scheduled to speak. St. Louis Fed President James Bullard has a 9:10 am speech in St. Louis. And at 1 pm, investors will hear from Richmond Fed President Jeffrey Lacker, as he gives a speech on the U.S. economic outlook in Richmond.
Looking to Capitol Hill, the Senate approved the "too big to fail" provision of the financial reform bill, the first part of that effort to receive wide bipartisan support.
In other news, Freddie Mac will ask for $10.6 billion more in federal aid after posting a nearly $8 billion loss in its latest quarter.