Wed, 28 Apr 2010 12:20:00 +0200

US futures slightly lower on Greek debt woes

FXstreet.com (Barcelona) - A day after crushing losses in European and US markets, US stock futures are pointing to modest losses upon open. Currently the DOW is showing losses of 0.31%, the NASDAQ 0.22% and the S&P 0.17%.

Yesterday equity markets fell lower with the downgrade of credit ratings for both Greece and Portugal as well as heightened possibility of financial reform on Capital Hill. The downgrade announcement brought with it new fears of contagion and doubts of overall euro zone stability as investors flocked to safer alternatives including US treasurys and the dollar.

"The danger of contagion is that panic can become self-fulfilling and very hard to turn once it gets beyond a certain point," remarks Allan von Mehren of Danske Bank. "In the current crisis, countries that look much better than Greece – such as Spain or Italy – could suddenly be in a crisis if bond yields rose to Greek levels. Given the size of these countries, it could become very critical and call for an unprecedented large-scale IMF rescue."