Monday, December 12, 2011

Why US stock futures down dec 12 2011

Why US stock futures down dec 12 2011 : U.S. equity futures declined, after Bundesbank President Jens Weidmann cooled speculation that the European Central Bank will extend its role and as Italy and France prepare to sell 13.5 billion euros ($18 billion) of debt.

Standard & Poor’s 500 Index futures expiring in March fell 0.9 percent to 1,241.9 at 9:24 a.m. in London. Contracts on the Dow Jones Industrial Average expiring the same month decreased 90 points, or 0.7 percent, to 12,053.

“There are a lot of uncertainties at the moment and it’s very risky to jump into muddy water,” said Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank AG in Frankfurt. “The market is very focused on the debt auction. All investors want to wait and see how the economy in the U.S. is developing.”

Weidmann told the Frankfurter Allgemeine Sonntagszeitung that governments must resolve the debt crisis, rather than the Frankfurt-based ECB. Germany’s top central banker added that the new accord on budget rules represents progress.

“The mandate for redistributing taxpayer money among member states clearly does not lie in monetary policy,” Weidmann told the newspaper in an interview published yesterday. “Financing of sovereign debt through central banks is and remains forbidden by treaty.”

Italy and France are preparing to sell bills today amid concern the euro area’s debt crisis is spreading to the region’s bigger economies. Italy plans to sell 7 billion euros of 365-day bills today, while France aims to auction 6.5 billion euros of debt of three different maturities.

U.S. Economy Improves
Reports showing the U.S. economy is improving helped send U.S. stocks to their first back-to-back weekly gain since October. The Thomson Reuters/University of Michigan gauge of confidence among consumers topped the median economist projection on Dec. 9, while a release on Dec. 8 showed that fewer Americans than forecast filed applications for unemployment benefits.

Sales at retailers probably rose in November as Americans bought more new cars and shopped for the holidays, showing growth in the U.S. is picking up heading into 2012, economists said before a report tomorrow. Other releases due this week may show factories expanded production and the cost of living was little changed. For the latest updates on the stock market, visit Stock Market Today
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