Stock index futures slumped Monday, tracking losses in Europe and Asia,amid renewed worries over a second bailout package for Greece.
EU leaders meet in Brussels on Monday to sign off on a permanent rescue fund for the euro zone. Greek Prime Minister Lucas Papademos will be among them as negotiators in Greece race to secure a debt swap deal.
A Financial Times report said that Greece had angrily rejected a German proposalto create a European budget “overseer” to monitor the country’s finances in return for a second bailout, further adding to investors’ anxiety on Monday.
A glimpse of hope for the debt-stricken region came in the form of a positive debt auction for Italy, which saw its borrowing costs for long-term debt fall sharply.
Among financials, Goldman Sachs upgraded Citigroup to "buy" from "neutral," citing a clearer path for the bank to return capital to shareholders. Meanwhile, the brokerage downgraded Bank of America to "neural" from "buy," saying it anticipates higher execution risk for the firm over the next 12-18 months.
Meanwhile, Goldman Sachs upgraded Morgan Stanley to a "conviction buy" from "neutral."
On the M&A front, U.S. Airways jumped after a report that Delta Airlines may be considering a takeover bid. Delta is also said to be considering a similar move for recently bankreupt American Airlines parent AMR.