By FRANCESCA LEVY
NEW YORK – Stocks appear set to start the week sharply lower as earnings season begins in earnest and international pressures mount.
Citigroup reported that its first-quarter income fell 32 percent, but its earnings still beat analysts’ expectations. The bank also set aside less money to cover losses from loan defaults as more customers made payments on time.
Several of other major financial institutions are due to report earnings this week, and traders are keen to determine whether banks are lending more. The upcoming reports from companies like Goldman Sachs and Wells Fargo are “crucial for the markets,” says Quincy Krosby, a market strategist for Prudential Financial. Yet solid earnings reports from Citigroup didn’t sway stock futures.
TD Ameritrade, Eli Lilly and Halliburton all reported earnings that beat Wall Street’s expectations Monday, but global events weighed on stocks.
World markets plunged as a Greek debt default loomed and China took another step to curb its runaway inflation.
Fears of a default in Greece pushed the euro down against the dollar, putting pressure on a U.S. market that is heavily invested in international companies.
“A stronger dollar has not been a friend to the U.S. equity market,” says Krosby.
Ahead of the opening bell, Dow Jones industrial average futures fell 134 points, or 1.1 percent. Standard & Poor’s 500 futures fell 14, or 1.1 percent. Nasdaq 100 futures fell 27, or 1.2 percent.
Egypt’s benchmark stock index fell more than 3 percent Monday, pulled lower by an investigation into the head of a Mideast private equity firm. The index has fallen more than 30 percent this year in the wake of the ouster of former president Hosni Mubarak.
Oil prices fell slightly but remain high, at $108 a barrel, constraining the market’s gains.
Japan’s nuclear crisis remains a worry after robots sent into two flooded buildings in that country’s crippled nuclear power plant detected unusually high levels of radiation.
Stocks ended last week lower but made modest gains on Friday after several encouraging economic reports overshadowed weak earnings from Google and Bank of America.
A service of YellowBrix, Inc.