Tuesday Outlook: No Solace For Equities

 |  Includes: DIA, EWC, EWG, EWQ, EWU, IVV, SPY, VOO
by: Market Blog

As European officials scurried to contain fears over a Greek default, skeptical equity investors voted with their feet.

France's CAC 40 sank 2 per cent, while Germany's DAX lost 0.5 per cent and Britain's FTSE slid 0.7 per cent. U.S. stock futures pointed towards a lower open, with Dow futures down 90 points, or 0.8 per cent, at 10,899 and S&P 500 futures down 10.7 points, or 0.9 per cent, at 1,146.60.

Futures for the S&P Toronto 60 stock index were down 8 points, or 1.2 per cent, at 686.

Investors remain unconvinced that European governments can work together to provide a feasible plan to avert a Greek sovereign debt default.

German Chancellor Angela Merkel indicated in a radio interview that Greece was making progress in meeting the demands of international creditors and said that avoiding an "uncontrolled insolvency" was a top priority. Vice-Chancellor Philipp Roesler said on Monday that there should be “no bans on thinking” in how to resolve the euro crisis, reinforcing concerns that Greece will end up defaulting.

Italian officials held talks with China's sovereign wealth fund in an effort to persuade Beijing to buy Italy's government bonds or invest in its companies, the Wall Street Journal and the Financial Times reported, citing unnamed sources.

French banks slid after the Wall Street Journal quoted an unnamed BNP Paribas executive as saying the bank was unable to secure dollar funding from U.S. money market funds. The bank denied the report.

Gold, a traditional haven, rose $5.90 to $1,819.20 (U.S.) an ounce.

Oil gained 79 cents, rising to $88.98 a barrel.

The Canadian dollar traded at $1.0055 (U.S.). The euro was down 0.2 per cent to $1.3634.

By Sonali Verma