Stocks set to drop on eurozone fears

NEW YORK (CNNMoney) -- U.S. stocks were poised to take a hit Monday, following a sell-off in global markets sparked by fresh eurozone debt worries. Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were all more than 1% lower ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Investors were struggling with a new wave of anxiety over the possibility that Greece will default on its debts.

Adding to overseas jitters, France's top banks prepared themselves for a possible credit downgrade from ratings agency Moody's, according to Reuters. Traders expect the downgrade announcement to be issued at any moment as the 90-day window for the review comes to a close. The credit ratings agency issued the review on June 15.

Stocks ended sharply lower Friday, as bad news out of Europe kept piling up. The sell-off triggered the sixth weekly decline in seven weeks for the Dow and S&P 500.

After the resignation of European Central Bank executive board member Jürgen Stark, investors grew increasingly concerned about a possible Greek default.


World markets plunge

A default has yet to materialize, but investors are clearly on edge as contagion fears tighten their grip on European markets.

World markets: European stocks were all sharply lower at midday. Britain's FTSE (UKX) 100 sank 2.6%, the DAX (DAX) in Germany plunged 3.6% and France's CAC (CAC40) 40 fell off 4.5%.

Asian markets ended lower. Tthe Hang Seng in Hong Kong (HSI) plunged 4.2% and Japan's Nikkei (N225) dropped 2.3%. Shanghai (SHCOMP) was closed for a market holiday.


Companies: Investors are awaiting Bank of America (BAC, Fortune 500) CEO Brian Moynihan's 9 a.m. ET presentation at the Barclays investors conference in New York for any insights into the bank's plans.

Bank of America is reportedly increasing job cuts to 40,000 from the 30,000 previously reported. Shares were down 2.6% in premarket trade.

Other bank shares were also lower in premarket trading. Shares of Citigroup (C, Fortune 500) were down 3.1%, shares of JPMorgan Chase (JPM, Fortune 500) fell 2.2%, and shares of Goldman Sachs (GS, Fortune 500) were off by 1.2%.

Also, shares of NetLogic (NETL), a semiconductor company, surged more than 50% after Broadcom Corporation (BRCM, Fortune 500) agreed to purchase the company in a deal worth $3.7 billion. Shares of Broadcom sank more than 23%.

McGraw Hill Cos. (MHP, Fortune 500) agreed to split into two companies -- one focused on its education unit, and the other will combine Standard & Poor's, McGraw-Hill Financial and Business Information. Shares of McGraw-Hill rose nearly 3%.

Commodities and currencies: The dollar was basically flat against the British pound and the euro, but slipped against the Japanese yen.

Oil for October delivery slipped $1.50 to $85.74 a barrel.

Gold futures for December delivery fell $13.70 to $1,845.80 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged higher, pushing the yield down to 1.89%.


By CNNMoney staff
September 12, 2011: 8:21 AM ET