Stock futures dropped early Monday, as investors reacted to troubling news out of Europe and China. In France, Socialist presidential candidate Francois Hollande came in first in a crowded field in the first round of voting, forcing a runoff with President Nicolas Sarkozy. Investors fear that a shift in power in France could imperil the Euro Zone’s economic pacts. Netherlands could also see a power shift after the Dutch prime minister reportedly resigned.
The political turmoil comes amidst a darkening economic backdrop; data showed European business activity falling at a surprising rate in April. In China, manufacturing contracted again in April.
Taken together, the news causing a mess in overseas markets. The German DAX is down 3% and Hong Kong’s Hang Seng index fell by about 1.8%.
U.S. markets look poised to fall early Monday after the major indexes had bounced back last week.
Dow futures fell 125 points to 12,863; S&P 500 futures fell 13.2 points to 1,362.
Pfizer (PFE) fell 0.4% after agreeing to sell its infant nutrition business to Nestle (NSRGY).
ConocoPhillips (COP) fell 1.6% after posting disappointing earnings.
Amilyn (AMLN) rose 12% on reports that the company is looking for another buyer after rejecting Bristol-Myers Squibb (BMY).
Wal-Mart Stores (WMT) fell 4.9% after The New York Times published an investigation of bribery allegations at Wal-Mart de Mexico.
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