European Stock Futures Fall After German GDP Data
European stock index futures fell in early trade on Tuesday, pointing to a drop in equities, after data showed German gross domestic product growth slowed more than expected in the second quarter.
US stocks rose on Monday following a flurry of merger and acquisition-related news, managing to wipe out last week's losses following the S&P downgrade of the US credit rating.
The Dow Jones Industrial Average rose by 1.9 percent, while the S&P 500 and Nasdaq jumped 2.18 percent and 1.88 percent respectively to end a third straight day of gains.
Futures for Euro STOXX 50, for Germany's DAX and for France's CAC were down 0.6 to 0.7 percent.
Cell phone stocks climbed following Google's offer to buy Motorola Mobility Holdings for around $12.5 billion.
Nokia shares jumped 9.1 percent on the news as investors anticipated the possibility of further takeovers in the sector.
All eyes will be on Paris on Tuesday as French President Nicolas Sarkozy meets his German counterpart Angela Merkel to discuss the crisis in the euro zone.
A report in Spanish newspaper El Mundo said that the leaders of the euro zone's biggest economies will discuss the possibility of a European economic authority, to improve the coordination of economic and monetary policies in the region and the creation of a European Monetary Fund.
The euro was steady against the dollar in Asian trade, hanging on to the majority of gains made on Monday and amid optimism that Tuesday's Franco-German summit will shed new light on how to contain the debt crisis in the periphery.
French and German policymakers have expressed little enthusiasm for the issuance of euro bonds as a way of tackling sovereign debt, but support for such a policy has gained momentum with the euro area and President Sarkozy and Angela Merkel might have to consider euro area bonds as an option.
Economic releases out on Tuesday include a raft of GDP data, including growth figures for Germany for the second quarter at 7:00am London time, followed by Spanish preliminary figures at 8:00am and euro zone and Portuguese GDP flash estimates at 10:00am.
In Italy, unions are expected to protest against austerity measures recommended by the European Central Bank and the EU, while business leaders are likely to oppose the recommendation of a new tax on wealthy Italians as discussions on the measures get underway in the country's Senate.