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Futures Slump Amid Worries Over Greece

CNBC.com and Reuters
Tuesday, 8 May 2012 | 8:44 AM ET

U.S. stock index futures pointed to a lower open Tuesday amid growing political turmoil in Greece.

Worries about Greece dragged on futures after the mainstream conservatives failed to form a coalition government in the wake of Sunday’s elections. That gives the Left Coalition party, which opposes the country's EU/IMF bailout, an opportunity to form a government. However, analysts were skeptical, pointing to the possibility of another election as early as June.

France’s new president, Francois Hollande, is scheduled to meet German Chancellor Angela Merkel next week to discuss how to tackle the economic crisis in Europe.

However, it appeared on Monday that dividing lines were already being drawn between the two after Hollande criticized Germany's heavy emphasis on austerity to tackle the sovereign debt crisis and called for policies to revive economic growth. But Merkel remained adamant, saying the fiscal agreement was not up for renegotiation.

McDonald's disappointed with a report that same-store saleswere lower than market expectations in April.

Fellow fast-food restaurant Wendy's dipped after the second-largest hamburger chain, posted earnings that missed expectations, due to higher beef costs.

Among media companies, Discovery Communications declined after the firm reported lower-than-expected earnings, hurt by losses at the Oprah Winfrey Network.

DirecTV said quarterly profit and sales rose, but shares fell after the satellite TV provider said it added fewer subscribers in the U.S.

Dow component Walt Disney is scheduled to post earnings after the closing bell.

The New Abnormal?
Randy Bateman, Huntington Asset Management Advisors CIO, says we have entered a "new abnormal" of market swings. "Western nations will see continued slow growth," he says.

HSBC , Europe’s biggest bank, beat expectations with an underlying profit of almost $7 billion in the first quarter thanks to a rebound in investment banking income and a fall in U.S. bad debts.

The bank said on Tuesday it had made good progress on all areas of strategy, including cost savings, and had shed 14,000 jobs since last year as part of chief executive Stuart Gulliver's plan to boost profitability.

Meanwhile, First Bank posted a narrower quarterly loss on a lower provision for loan and lease losses, and the private equity bank said it will buy a credit-card portfolio to re-enter the credit card business.

Yahoo's board convened on Monday afternoon to discuss the mounting upset surrounding Chief Executive Scott Thompson, who has apologized to employees after being accused last week by activist investor Daniel Loeb of padding his resume, a source with knowledge of the matter said.

General Electric is buying a 15 percent stake in Shanghai-listed China XD Electric Group for about $535 million, giving the U.S. conglomerate a foothold in China's vast electrical infrastructure market and access to XD's technology.

Wynn Resorts posted quarterly results that lagged Wall Street targets after robust growth in Macau failed to make up for flagging Las Vegas revenue, underlining the incentive for CEO Steve Wynn to develop his business further in the bustling Chinese enclave.

Facebook Chief Executive Mark Zuckerberg took questions about the social network's slowing revenue growth and its $1 billion Instagram purchase, kicking off a road show on Monday to promote its $10 billion IPO.

Elsewhere, Richmond Federal Reserve Bank president Jeffrey Lacker said that further monetary stimulus would not do much for a U.S. labor market that is plagued by longer-term, structural issues such as skills mismatches.

—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC

Coming Up This Week:

TUESDAY: 3-yr note auction; Earnings from Disney
WEDNESDAY: Weekly mortgage apps, wholesale trade, oil inventories, 10-yr note auction, BofA shareholders mtg, Fed's Kocherlakota speaks, Fed's Pianalto speaks, Fed's Plosser speaks; Earnings from Toyota, AOL, Dean Foods, Macy's, Cisco, Activision Blizzard, NewsCorp, Priceline.com
THURSDAY: International trade, jobless claims, import & export prices, 30-yr bond auction, Ford shareholders mtg, Fed Chairman Bernanke speaks, Fed's Evans speaks, Fed's Kocherlakota speaks; Earnings from ArcelorMittal, Kohl's, Sony, Nordstrom
FRIDAY: Producer price index, consumer sentiment; Earnings from Nissan, Nvidia

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