Stock index futures gained Tuesday, with the Dow poised to open above the psychologically-important 13,000 level, after euro zone finance ministers finally sealed a bailout for Greece.
European shares steadied after hitting seven-month highs in the previous session, with strategists saying the focus would now turn to the bleak outlook for Greece’s economy after the country secured a bailout package.
Euro zone finance ministers sealed a 130 billion euro ($172 billion) bailout for Greece to avert a default in March, after persuading private bondholders to take greater losses and the Greek government to commit to deep cuts.
Among earnings, Home Depot[HD 46.71
] gained after the home improvement retailer posted earnings that beat estimates.
Meanwhile, Wal-Mart[WMT 62.48
And fellow Dow component Kraft [KFT 38.01
Macy’s [M Loading… ()
Dell[DELL 18.16
Pfizer [PFE 21.19
The government is scheduled to auction $35 billion in two-year notes at 1pm ET.
Europe is still struggling to avoid the threat of default as investors warned Greece will soon risk violating the terms of its second bailout in three years.
Seven months of negotiations ended in the pre-dawn hours in Brussels with Greece winning 130 billion euros ($172 billion) in aid it needs to avoid a March bankruptcy. Any respite may prove temporary after it signed up to a program of austerity and economic reform aimed at slashing debt to 120.5 percent of gross domestic product by 2020 from about 160 percent last year.
Even with investors and central bankers chipping in to relieve the debt burden, economists from Citigroup Inc. to Commerzbank AG concluded Greece may again fail to deliver amid a fifth year of recession, looming elections and social unrest. The upshot could be the removal of aid and renewed debate over the merits of fresh assistance before year-end as policy makers shift toward doing more to inoculate the rest of Europe from contagion.
“The bailout bandage is on, but it won’t take much to unravel,” said David Miller, partner at Cheviot Asset Management in London. “The euro zone has done its best to ensure that Greece will deliver on promises, but there is considerable scope for backtracking on deficit reduction.”
Financial markets signaled doubt the accord will fix Greece’s travails permanently or spell an end to the two-year debt crisis. The euro surrendered initial gains against the dollar and European stocks fell from a six-month high.
Stocks to Watch
Corcept said the U.S. Food & Drug Administration approved its Korlym treatment for patients with Cushing’s Syndrome, a rare endocrine disorder. Shares of the pharmaceutical company surged 58% to $4.80 after hours Friday.
Codexis President and Chief Executive Alan Shaw resigned, prompting the biotechnology company to promote an internal executive to his post while it seeks a permanent replacement. Shares fell as much as 17% from their $4.58 close after hours as the company named Peter Strumph, senior vice president and business head of pharmaceuticals, as its interim CEO.
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