Banco Espirito Santo default fears weigh on global markets

|By:, SA News Editor

Stock futures are sharply lower amid several U.S. corporate downside pre-announcements and worries over the health of Portuguese banks; S&P and Dow -1.1%, Nasdaq -1.2%.

U.S. stocks are taking cues from the European periphery nations after Banco Espirito Santo missed a debt payment, sparking worries of a potential default by Portugal's second largest bank; the U.K.'s FTSE trades -1% with financials leading the retreat, while Germany's DAX and France's CAC each -1.8%.

In the forex market, investors are reducing their exposure to the euro while boosting the dollar and the yen.

A better than expected U.S. jobless claims report was almost unnoticed.

Potbelly -18.7% and Lumber Liquidators -21.7% premarket after both primed the market for disappointing quarterly reports.

Treasurys are rallying, with the 10-year benchmark higher by 13 ticks and its yield nearly 5 bps lower at 2.51%.

Still ahead: wholesale trade, EIA natural gas inventories.