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Monday, September 19, 2011

Futures fall as Greece is concerned w/ Money

LONDON—Wall Street was set to open sharply lower Monday, as concerns escalated over the possibility of a Greek debt default, while the spotlight in the U.S. will be on President Barack Obama's plan to reduce the federal deficit.
Associated Press
A trader at the New York Stock Exchange.
Futures on the Dow Jones Industrial Average dropped 166 points to 11280 and those on the Standard & Poor's 500 stock index fell 21.40 points to 1190.60. Nasdaq 100 futures declined 36.50 points to 2270.70.
The declines came after U.S. stocks rose for five consecutive sessions to mark their best week since July. The blue-chip Dow index rallied 4.7% last week, snapping a two-week losing streak.
Asian stocks dropped Monday and European equity markets also fell sharply, with the pan-European Stoxx 600 index down 2% in midday trade. The ASE Composite index in Athens fared even worse, slumping 3.2%.
In Greece, the cabinet of Prime Minister George Papandreou met on Sunday to discuss growing concerns over the nation's ability to meet its fiscal targets. The so-called "troika" of international lenders—the International Monetary Fund, the European Central Bank and the European Commission—are withholding the next disbursement of aid to Greece until the government comes up with a credible plan to meet its deficit-reduction commitments.
In a sharply worded statement released after the cabinet meeting Sunday, Finance Minister Evangelos Venizelos said the government takes full responsibility for the implementation of the agreed program, but also warned that Greece shouldn't be the "scapegoat" used by European institutions to hide their inability to manage the euro-zone crisis.
Mr. Venizelos is due Monday to hold a teleconference with representatives from the troika.
In the U.S. on Monday, President Obama is expected to unveil his plan to reduce the federal deficit by more than $3 trillion over ten years. He is due to speak at 10:30 a.m. Eastern time in the White House.
The Wall Street Journal reported that the president's plan includes $1.5 trillion in tax increases, mostly on wealthy individuals and corporations. The call for tax hikes is likely to be met with stiff resistance from Republican lawmakers.
On the economic calendar, the NAHB Housing Market Index for September is due shortly after the U.S. stock market opens.
In currency markets, the dollar rose Monday, as worries about the euro-zone debt crisis spurred demand for assets perceived as safe havens. The dollar index, which tracks the performance of the U.S. currency against a basket of major rivals, rallied 0.9% to 77.233.
The euro dropped 0.3% to $1.3642.
In corporate news, Netflix Chief Executive Reed Hastings said in a blog post on Sunday that the firm will separate its DVD-by-mail service—to be renamed Qwikster—from its video-streaming business. Mr. Hastings also apologized to customers about the way the company communicated recent price changes, saying "I messed up."
Write to P. Lesova                
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