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European, US stock indices drop

16 December 2009 07:52 (UTC +04:00)

Baku- APA-Economics. Stock futures are indicating a lower opening on Wall Street Tuesday following declines in overseas markets and as the Federal Reserve prepares to begin a two-day meeting on interest-rate policies.
Overseas markets slipped Tuesday as the dollar rose against the euro amid continuing worries about Greece’s debts and the financial health of Austria’s banks.
The Fed is expected to keep rates unchanged when it makes its announcement Wednesday.
A number of investors see a rate hike coming within the next year as the Fed takes a pre-emptive strike to keep inflation at bay. That would help shore up the value of the dollar, but it could also trip up a huge rally that has launched stocks sharply higher over the past nine months.
On Tuesday, investors will get fresh assessments of producer prices and the housing market.
The Labor Department reports on wholesale prices for November, and prices are expected to have risen, driven by higher gasoline prices.
Economists surveyed by Thomson Reuters expect wholesale prices rose by 0.8 percent last month following a 0.3 percent increase in October. Excluding energy and food, they expect core inflation will show a smaller 0.2 percent rise after dropping 0.6 percent in October.
The report is due at 8:30 a.m. EST.
The National Association of Home Builders is expected to release its housing market index for December. The index tracks builders’ perceptions of market conditions around the country.
Ahead of the opening bell, Dow Jones industrial average futures fell 29, or 0.3 percent, to 10,469. Standard & Poor’s 500 index futures fell 3.40, or 0.3 percent, to 1,105.20, while Nasdaq 100 index futures fell 5.75, or 0.3 percent, to 1,802.00.
Investors know that any market gains could slip in this last full trading week of the year, as traders may try to lock in profits made since March.
Major stock indexes closed at new highs for the year Monday as Abu Dhabi’s $10 billion in aid to help Dubai eased concerns over the emirate’s debt problems. A takeover deal by Exxon Mobil Corp. raised optimism about mergers and acquisitions activity.
Late Monday, Wells Fargo became the last of the big banks to strike a deal to repay U.S. government assistance. The San Francisco-based bank said it would sell $10.4 billion in new stock to help repay all $25 billion in bailout aid it received from the government at the height of the market meltdown last fall. Earlier in the day, Citigroup Inc. said it would repay $20 billion worth of taxpayer funds.
Bond prices were mixed Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged from 3.56 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.05 percent from 0.03 percent.
The dollar rose against other major currencies, while gold prices fell.
Overseas, Japan’s Nikkei stock average fell 0.2 percent. In afternoon trading, Britain’s FTSE 100 was down 0.6 percent, Germany’s DAX index was down 0.2 percent, and France’s CAC-40 was down 0.3 percent.