U.S. stock futures drop ahead of Slovakia vote

MADRID (MarketWatch) — U.S. stock futures fell on Tuesday ahead of a tense parliamentary vote in Slovakia on changes to the euro zone’s rescue fund and as traders awaited the start of earnings season. 

Futures on the Dow Jones Industrial Average DJ1Z -0.55%  dropped 58 points to 11,310 and those on the Standard & Poor’s 500 index SP1Z -0.68%  slipped 8 points to 1,182.90. Nasdaq 100 futures ND1Z -0.40%  fell 8.25 points to 2,268.50. 

Enthusiasm over hopes for bank support in Europe helped the Dow Jones Industrial Average DJIA +2.97%  advance nearly 3%, or 330.06 points, Monday, its biggest one-day point and percentage rise since Aug. 11. 

However, losses in Europe were casting a shadow over Wall Street Tuesday, with the Stoxx Europe 600 XX:SXXP -1.10%  down 1% ahead of a vote in Slovakia on plans to bolster the European Financial Stability Facility. Slovakia’s Freedom and Solidarity party, a member of the ruling coalition, said Tuesday it would abstain from the vote, leaving the government likely short of votes needed for approval. Read Slovak government split over EFSF vote 

 

Meanwhile, the troika of international creditors said in a statement on Tuesday said Greece would likely get its much-needed next aid tranche in November, though it also said the country would not likely meet its fiscal target for 2011, partly owing to a further drop in gross domestic product. 

In corporate news, Alcoa Inc. AA -0.89%  is due to kick off earnings season with results after the close of regular trading on Tuesday. Chevron Corp. CVX -0.69%  is expected to deliver a third-quarter update after the close. 

Louise Cooper, markets analyst at BGC Partners, said investors will scrutinize company earnings and pay special attention to banks such as J.P. Morgan Chase & Co. JPM -2.18% , which is due to report Thursday. She said there are fears Goldman Sachs Group Inc. GS -1.80%  , due to report Oct. 18, “will plunge back into the red.”

“A good corporate profits season could help equities continue to rally, but the really big question is what about 2012,” Cooper said in emailed comments. “Forecasts are still for good profit growth next year, and yet given the hugely uncertain European environment, this optimism could be erroneous.” 

Shares of Dollar Thrifty Automotive Group Inc. DTG -2.38%  fell 2.3% after saying it plans to remain an independent company and will go ahead with a plan to buy back $400 million in stock. 

The Federal Reserve’s FOMC will release the minutes from its September meeting on Wednesday. 

In Asia, the Hang Seng index HK:HSI +2.43%  rose 2.4%, as financial shares surged after a state-backed investment fund lifted its holdings in four of China’s biggest banks. Read China's CIC lifts stakes in local banks 

 

Commodity prices pulled back in step with stocks. Gold futures for December delivery GC1Z -0.38%  fell $10.10 to $1,660.90 an ounce, while crude oil for November delivery CL1X -0.76%  dropped $1.13 cents to $84.27 a barrel in electronic trading. 

The euro slipped 0.3% to $1.3579. 

The dollar index DXY +0.32% , which measures the performance of the greenback against a basket of six currencies, traded at 77.750, up from 77.581 in late North American trading on Monday. 

Source; http://www.marketwatch.com/story/us-stock-futures-drop-ahead-of-slovakia-vote-2011-10-11?dist=markets