MarketWatch.com - Pre-Market Indications

Monday, March 22, 2010

Indications: U.S. stock futures point to weaker start

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures pointed to a weaker start Monday with the insurance and pharmaceutical sectors in the spotlight as the House of Representatives passed a health reform bill, while continued jitters around Greek finances and India's rate tightening also played a role.

S&P 500 futures fell 7.6 points to 1,148.70 and Nasdaq 100 futures dropped 10.75 points to 1,921.50. Futures on the Dow Jones Industrial Average fell 53 points.

Major Changes Ahead As Health-Care Reform Passes

WSJ's Peter Landers details how the Obama Administration's health-care reform, which passed 219-212 in the House of Representatives Sunday night, will lead to great changes in the way millions of people find and buy health insurance.

An eight-session winning run for the Dow Jones Industrial Average had come to a halt on Friday as India unexpectedly hiked interest rates and as Palm shares plunged in the wake of a weak sales outlook. The Dow industrials fell by 37 points, the S&P 500 fell 5 points and the Nasdaq Composite dropped 16 points.

Another drop looked set as the House of Representatives voted for a health reform bill by a narrow margin. See full story.

Analysts at U.K. broker Panmure Gordon, who follow AstraZeneca /quotes/comstock/13*!azn/quotes/nls/azn (AZN 44.11, -0.63, -1.41%) and GlaxoSmithKline /quotes/comstock/13*!gsk/quotes/nls/gsk (GSK 38.57, -0.65, -1.66%) , estimate the bill will cut earnings per share by 1.5% to 2.2% each year for the first five years of the bill's enactment. But they recommend buying both, noting attractive valuations and dividend yields.

Besides health-related stocks, Greece also was a focus as German Chancellor Angela Merkel told a radio station that markets shouldn't expect a Greek aid package when European leaders gather later this week. The euro weakened vs. the dollar, and Greek bonds widened relative to German ones. See story.

Williams-Sonoma /quotes/comstock/13*!wsm/quotes/nls/wsm (WSM 24.14, -0.31, -1.27%) climbed nearly 5% after reporting better-than-forecast earnings and hiking its dividend by 8%. Tiffany /quotes/comstock/13*!tif/quotes/nls/tif (TIF 47.25, -0.33, -0.69%) dropped over 3%, as its quarterly earnings missed expectations.

American International Group /quotes/comstock/13*!aig/quotes/nls/aig (AIG 34.80, +0.16, +0.46%) fell over 2% as former CEO Hank Greenberg's Starr International said it would sell up to 10 million shares for $278 million to UBS /quotes/comstock/13*!ubs/quotes/nls/ubs (UBS 15.73, +0.09, +0.58%) .

Credit Suisse /quotes/comstock/13*!cs/quotes/nls/cs (CS 51.45, -0.45, -0.87%) dropped over 2% after restricting banker travel to Germany, following an investigation by the country into 1,100 customers and staff. See story.

Asian stocks dropped in their first opportunity to react to the Indian rate hike news, and Europe stocks dropped for the third straight session. See Asian markets.

Oil futures fell below $80 a barrel, and metals contracts also declined.

Steve Goldstein is MarketWatch's London bureau chief.


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