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business newsPre-Market Primer: Weak Eurozone Data Stoke Recession Fears
By
Vincent Trivett
Feb 22, 2012 9:05 am
A contraction in eurozone manufacturing and services drags down futures. Markets have little confidence in the Greek bailout.
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European markets fell again today, as Markit’s Purchasing Managers Index showed a contraction in the service and manufacturing sectors, renewing fears of a euro-area-wide recession. PMI for the 17 countries using the common currency fell to 49.7 from 50.4 in January, missing economists’ estimates.
Chinese factory output also shrank this month. Chinese PMI hit 49.7, slightly better than the 48.8% in January.
Fitch cut Greece’s rating to C from CCC, echoing the markets’ vote of no-confidence in the eurozone’s bailout of the distressed Mediterranean country. Fitch considers the possibility of involuntary writedowns through collective action clauses to be a borderline default.
Fitch said in a press release:
The bailout terms aren't even set in stone. It still has to be approved by the Parliaments of Germany and the Netherlands, and at least 90% of creditors have to agree to the terms of the debt exchange.
Stock futures slid after the weak eurozone and Chinese data.
Discount chain Dollar Tree (DLTR) reported record profits despite a decrease in comparable store sales in the fourth quarter. The retailer topped earnings estimates by $0.01, banking $1.60 per share.
Intuit (INTU) shares are up 3.41% ahead of the bell today. The maker of Quicken and TurboTax software reported a 62% year-over-year increase in earnings for its fiscal second quarter. The company booked $0.51 per share.
Toll Brothers (TOL) is down 3% in the pre-market, as it reported a loss of $0.02 per share, down from a profit of $0.02 per share one year earlier. The largest luxury homebuilder in the US was expected to earn $0.03 per share. Toll Brothers has struggled to find customers for high-end homes in a market flooded with cheap foreclosed properties. Potential customers are also reluctant to sell their present homes in a distressed market.
All eyes will be on the National Association of Realtors’ January existing home sales report to be released at 10:00 a.m. EST. Economists expect home sales to tick up to 4.65 million from 4.61 million in December.
Twitter: @vincent_trivett
Chinese factory output also shrank this month. Chinese PMI hit 49.7, slightly better than the 48.8% in January.
Fitch cut Greece’s rating to C from CCC, echoing the markets’ vote of no-confidence in the eurozone’s bailout of the distressed Mediterranean country. Fitch considers the possibility of involuntary writedowns through collective action clauses to be a borderline default.
Fitch said in a press release:
In Fitch's opinion, the exchange, if completed, would constitute a 'distressed debt exchange' (DDE) in line with its criteria and consequently yesterday's announcements set in motion the agency's process for reviewing Greece's issuer and debt securities ratings. The sovereign IDR has accordingly been lowered to 'C' from 'CCC' indicating that default is highly likely in the near term.
The bailout terms aren't even set in stone. It still has to be approved by the Parliaments of Germany and the Netherlands, and at least 90% of creditors have to agree to the terms of the debt exchange.
Stock futures slid after the weak eurozone and Chinese data.
- Dow (^DJI) futures are down 0.07% at 12.936.00.
- S&P 500 (SPY) futures slid 0.12% to 1,358.50.
- Nasdaq (^IXIC) futures fell 0.11% to 2.558.25.
Discount chain Dollar Tree (DLTR) reported record profits despite a decrease in comparable store sales in the fourth quarter. The retailer topped earnings estimates by $0.01, banking $1.60 per share.
Intuit (INTU) shares are up 3.41% ahead of the bell today. The maker of Quicken and TurboTax software reported a 62% year-over-year increase in earnings for its fiscal second quarter. The company booked $0.51 per share.
Toll Brothers (TOL) is down 3% in the pre-market, as it reported a loss of $0.02 per share, down from a profit of $0.02 per share one year earlier. The largest luxury homebuilder in the US was expected to earn $0.03 per share. Toll Brothers has struggled to find customers for high-end homes in a market flooded with cheap foreclosed properties. Potential customers are also reluctant to sell their present homes in a distressed market.
All eyes will be on the National Association of Realtors’ January existing home sales report to be released at 10:00 a.m. EST. Economists expect home sales to tick up to 4.65 million from 4.61 million in December.
Twitter: @vincent_trivett
No positions in stocks mentioned.
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