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Dow seen opening lower on Greek pessimism, Dell, Toll Brothers in focus

22nd Feb 2012, 7:37 am by Joyanta Acharjee
Dow seen opening lower on Greek pessimism, Dell, Toll Brothers in focus

US equity markets looked set to open lower Wednesday with investors reluctant to press for further gains a day after the Dow briefly topped the 13,000 level for the first time since 2008 and on doubts that Greece's newest bailout will be enough.

In pre-market trading, the Dow Jones Industrial Average slipped 8 points to 12,937, the S&P 500 fell 1.3 points to 1,358.80 while the NASDAQ lost 0.5 points to 2,590.50.

Tuesday US markets ended mixed with the Dow up 0.12%, the S&P 500 was 0.07% higher and the NASDAQ was down 0.11%.

Analysts caution that Greece will eventually need more support for its long-term debt a day after a fresh 130 billion euro bailout was agreed.

Greece already passed a package of unpopular austerity reforms in order to qualify for the funds, and experts argue that these measures further stunt the nation's shrinking economy.

Greece's fate also depends on whether private sector investors agree to debt reduction agreement terms, which include a write down of 53% on the face value of Greek government bonds -- steeper than the previous 50% reduction agreed to in October.

Elsewhere, China's manufacturing shrank for a fourth month in February, a preliminary report suggests. The flash reading of 49.7 of an index from HSBC Holdings (NYSE:HBC) and Markit Economics today compares with a final 48.8 in January.

A number below 50 indicates a contraction.

In corporate news, Dell (NASDAQ:DELL) shares were down 6% premarket as the computer maker late Tuesday reported that profit dropped and that its sales forecast would be weaker than anticipated.

For its fiscal fourth-quarter, profit was 51 cents per share on revenue of $16.03 billion. Wall Street analysts surveyed by FactSet Research had forecast profit of 52 cents per share on revenue of $15.97 billion.

Luxury homebuilder Toll Brothers (NYSE:TOL) Wednesday morning posted a swing to a fiscal first-quarter loss from a year-earlier profit on 3.6% lower revenue.

Citigroup (NYSE:C) could face a multibillion-dollar write-down as it begins to unwind its minority investment in the Morgan Stanley Smith Barney brokerage, according to press reports. Morgan Stanley (NYSE:MS) has the right to start buying Citigroup out of the venture this spring.

Johnson & Johnson (NYSE:JNJ) said late Tuesday that chief executive Bill Weldon will step down in April.

After the closing bell, Hewlett-Packard (NYSE:HPQ) is scheduled to post quarterly numbers.

On the economic front, the spotlight will turn to real estate as the National Association of Realtors releases existing-home sales for January at 10 am EDT. Existing-home sales are expected to slip slightly, to 4.5 million units from 4.61.

Commodities

In NYMEX futures trading, crude for April delivery slipped 43 cents to $105.82 a barrel while gold futures for April delivery fell $3.00 to $1,755.50 an ounce.

Europe

European services and manufacturing output unexpectedly shrank this month as the euro-area economy struggles to rebound from a contraction in the fourth quarter.

A euro-area composite index based on a survey of purchasing managers in both industries dropped to 49.7 from 50.4 in January, London-based Markit Economics said. Economists had forecast a reading of 50.5.

European stocks were lower in morning trading with the FTSE 100 down 0.4%, the DAX dropped 1% and the CAC 40 edged 0.5% lower.

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