Futures Lower; Dollar Surges vs. Euro
US stock index futures pointed to a lower open Wednesday as the dollar rose to an 11-month high against the euro and investors speculated that more euro zone countries may be downgraded in the near term.
European stocks slipped in morning trade in a broad retreat, with the euro zone's blue chip Euro STOXX 50 index down nearly 7 percent over a week.
An auction of Italian sovereign debt saw the euro zone's third-largest economy pay a euro era record yield of 6.47 percent to sell five-year paper. The sale came after the EU tried to move towards greater fiscal integration at last week's summit, adding to investor concerns.
The National Bank of Greece has indicated it will seek shareholders' approval for a 1 billion-euro government bailout, sending its shares up 10 percent in premarket trading.
The House of Representatives passed its version of a payroll tax cut extension, but the bill is considered to have no chance in the Senate. Also up in the air: a deal to avert a government shutdown, with complications arising after the two parties had struck a tentative deal to fund the government through the end of 2012.
In corporate news, U.S. banks are demanding the new Consumer Financial Protection Bureau give up its right to sue over certain flawed mortgage originations in exchange for their participation in a multibillion-dollar settlement of alleged foreclosure abuses, the Wall Street Journal reported.
HTC, the world's No.4 smartphone maker, said a U.S. court has further postponed a final ruling on its lawsuit against Apple, which is seeking a ban on sales of HTC devices in the U.S. market.
U.S. heavy machinery maker Caterpillar said it would sell a part of its Bucyrus distribution business to the industrial division of Malaysia's Sime Darby for about $360 million.
Morgan Stanley will return about $700 million to investors in its real-estate mega fund and slash fees to extend the investment vehicle's life till June 2013, the Wall Street Journal said, citing people familiar with the matter.
Avon Products is looking for a new chief executive to replace Andrea Jung, who has lost the confidence of Wall Street after a myriad of problems, including a federal bribery probe and weak sales in key international markets.
Fiat expects operating profit at its U.S. unit Chrysler to be at $3 billion in 2012, chief executive Sergio Marchionne also said on Wednesday.
Marriott International named current chief operating officer Arne Sorenson as its chief executive officer with effect from March 31.
Gold prices continued their precipitous fall, dropping about 1.8 percent in morning trade. Oil also fell below $99 a barrel.
In economic news, mortgage applications rose 4 percent in the past week. The positive news came a day after the National Association of Realtors admitted that its data for the past several years has been flawed, resulting in a substantial overcount of the actual home sales during the period. A final count will be issued next Wednesday.
Also, import prices showed their biggest rise in seven months at 0.7 percent, though it was less than economists had expected. The gain came mostly from rising petroleum prices.
Meanwhile, the Treasury Department will sell $13 billion in 30-year bonds on Wednesday, with the results available shortly after 1pm New York time. That follows strong demand in its 3-year and 10-year note auctions Monday and Tuesday.
Debt prices were mostly flat, with the benchmark 10-year note yielding 1.96 percent.
The earnings calendar only has a handful of companies on Wednesday's list, with Joy Global the largest of those scheduled to be issued before the opening bell.