U.S. stock-market futures declined Monday morning following the long holiday weekend. As the hopes for a quick economic recovery waned, oil prices dropped sharply, adding to pressure on stocks. After focusing much on the economy, investors will now turn their attention also to earnings as the beginning of the second quarter earnings season begins. Meanwhile, today, the headlines have more auto news as the General Motors' bankruptcy plan received a federal judge's approval.
Vice President Joe Biden didn't help to instill confidence in Wall Street when said Sunday on an ABC interview the Obama administration "misread how bad the economy was." He added, though, that the administration stands by its stimulus package and believes the plan will create more jobs as the pace of its spending picks up. With nonfarm payrolls data last Thursday showing U.S. employers slashed 467,000 jobs in June -- 100,000 more than anticipated -- many hope the administration is right.
Overseas, world stock markets fell as oil prices slumped Monday. But, as global investors awaited to see what Wall Street will be doing, trading volumes were light in Europe and Asia.
And with the second quarter earnings season about to begin, companies will likely continue to show earnings decline of an estimated 34 percent as consumer spending drops with the highest unemployment in a quarter-century. For the third quarter, the year-over-year profit slide for Standard & Poor's 500 Index members may narrow to 21 percent. It declined about 60 percent in the year's first three months, according to data compiled by S&P and Bloomberg. Only by year-end, when comparisons are with the dismal fourth quarter 2008, may we see earnings rise.
Only one economic indicator is due out today: The Institute for Supply Management releases its index on the services sector of the economy at 10:00 a.m. Eastern. The index is expected to have risen to 46 in June from 44 in May, according to Briefing.com.
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