U.S. Stock Futures Fall After European Voters Reject Austerity

Europe stocksNEW YORK -- The roiling political landscape of Europe pushed U.S. stock futures lower Monday as beleaguered voters in Greece and France rejected years of painful budget cuts.

The Dow Jones industrial average fell 46 points to 12,911. The Standard & Poor's 500 slipped 5.7 points to 1,356.80. The Nasdaq composite index fell 12 points to 2,613.50.

The parliament in Greece is split after elections Sunday and there is no party close to forming a new government. The French ousted President Nicolas Sarkozy, part of a wave of unrest over budget cuts as unemployment spirals higher and social services and safety nets evaporate.

Elected in Sarkozy's place was Socialist Francois Hollande, who pledged immediately "to finish with austerity."

Germany's DAX fell 0.8% to 6,506, while the CAC-40 in France fell 0.3% to 3,153. The FTSE 100 of leading British shares were closed for a holiday.

Greek shares tumbled, trading 8.2% lower at one stage before recouping some ground alongside other European markets and paring its decline to 6%.

Developments overseas have sent U.S. financial stocks lower in premarket trading.

JPMorgan Chase & Co., Bank of America Co. and Citigroup Inc. all headed lower before the opening bell.

And there are signs Europe's biggest banks have begun to pile up cash with fears of another freeze in credit markets there.

Sentiment remains stronger in the U.S., particularly among consumers, who are crucial for any full economic recovery at home.

The Federal Reserve will release its latest consumer borrowing report Monday afternoon.

Economists predict that consumer borrowing rose by $10 billion in March, according to a survey by FactSet, which would mark the seventh consecutive month of gains.

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ccdae5

Socialism does not work long term, i hope we look at Europe and learn this lesson soon.

May 08 2012 at 7:29 AM Report abuse +3 rate up rate down Reply
ccdae5

Those myopic Europeans are working very hard to destroy their economies, even harder than the US government is doing to ours. The Euro is toast and Germany will never finance another bailout for their loser neighbors.

May 08 2012 at 7:26 AM Report abuse +2 rate up rate down Reply
ed27th

This what happens when people can vote themselves gifts from the public treasury. This will lead to increasingly poor financial policy to pay for the "Bread and circuses".(Look up the downfall of Rome) Nations of public assistance addicts. And when government can't deliver the goodies anymore, we will start goint thru withdrawl symptoms. Riots, civil unrest. Look at Greece. Look closer, Occupy movement. It's all good, as long as Robin Hood can deliver. What happens when he can't?

May 07 2012 at 11:47 PM Report abuse +2 rate up rate down Reply
1 reply to ed27th's comment
ccdae5

The US government is heading down the same path to economic collapse with Obama leading the charge through huge deficits and massive government debt. We must vote him out in Nov if we are to leave anything for our children and grand children.

May 08 2012 at 7:28 AM Report abuse +2 rate up rate down Reply
thefosz

This is the very thing the REPUBLICAN PARTY wants in America. The REPUBLICAN PARTY wants unemploymentn to spirals higher and social services and safety nets to evaporate. Why, because we will have a surplus of labor to work at much cheaper wages. You just wait, it shall happen to all of us.

May 07 2012 at 10:07 PM Report abuse -6 rate up rate down Reply
2 replies to thefosz's comment
democracks0

LMAO. THIS IS WHAT YOUR HERO OBAMA HAS BEEN WORKING ON FOR THE LAST 3 + YEARS. HIGH UNEMPLOYMENT, OUT OF CONTROL SPENDING, DEMONIZING SUCCESS, AND DIVIDING THE COUNTRY.

WHAT AN OBAMITE.

May 07 2012 at 10:30 PM Report abuse +3 rate up rate down Reply
democracks0

OBAMAS A FIASCO

May 07 2012 at 10:31 PM Report abuse +3 rate up rate down Reply
lindacharliebb

a good look at the effects of socialism , hand outs , and "free stuff" .

May 07 2012 at 9:38 PM Report abuse +6 rate up rate down Reply
dgs755

Mike, You say socialism will not work but capitalism sure isn't doing it either. The unmitigated bastards on Wall street namely big banks with their commander in chief the Ben Bernanke have wrecked the freight train
and have bailed themselves out while leaving most everyone else behind. They have used enormous amounts of money printing (nothing more than electronic zeros) 16 trillion plus zero's and are telling everyone else you must cut back in education, police, fire, infrastructure spending blah blah blah,
There is higher energy prices, food prices, no return on savings all to prop the stock market , so the fraud can continue. Truly just opposite should be happening . First and foremost, the government should
not have to borrow their own currency from anyone as is done now through the fraudulent Federal Reserve Central Bank system. Who gave these banks all the marbles ????? Let's get real, they buy U.S. Government debt with their phony printed money and then have the balls to charge interest on the money.
This is absolutely ridiculous and why people are not screaming is beyond me. You hate socialism ?
What do you call police, fire, military healthcare and social services ? How about highway and school systems ? There should be nationalized health care too. Just imagine the government creates it's own money and spends it into existence through infrastructure, hiring private sector companies to fill the contracts. Where do you thing the current highway system came grom, or the national parks ?
Don't tell me how wonderful capitalism is cause it has not done any of that !

May 07 2012 at 9:19 PM Report abuse -3 rate up rate down Reply
1 reply to dgs755's comment
ed27th

It seems to have done well for us so far. Ask any immigrant you chose. I don't recall many people running to the Soviet Union, in my day. If you want Mommy and Daddy to take care of you, move back home.

May 07 2012 at 11:53 PM Report abuse +2 rate up rate down Reply
Mike

This is a riot (well, a laugh riot). Of course the (idiot) voters are going to vote against austerity. Face it, folks. You are royally you-know-what. If the government (which doesn't have any of its own money; it's the taxpayers' money) is going to be called on for more spending to bail out the economy, it's game over. Government must cut spending. Now, the newly elected French King (oops, I mean President) is going to inflict ridiculous marginal tax rates of 45% and 75% on those with higher incomes (starting at $ 150K I believe). Yeah, well if I was in that income bracket, I would be leaving lock, stock and barrel and going somewhere else. Socialism does not work. Because I tell you, once the people making any money realize that they are working their butts off for everybody else, they will shut down. Everybody is going to want a free ride. And then it's game over.

May 07 2012 at 8:48 PM Report abuse +3 rate up rate down Reply
Charles

It's not austerity. It's living on handouts paid for by someone else's Euro!

May 07 2012 at 8:16 PM Report abuse +3 rate up rate down Reply
Michael

Austerity is another word for what is to come. Like a freight train. Gonna happen. Facts are that the have nots have taken over in France and Greece..this trend has been happening for years...80 or so...as predicted by many economists and sociologists in the 1930's. When the have nots out vote the haves in this country.....guess what...the economy stops....The smart hard working people have no incentives ...so things just stop. Capitalism in China and Russia have made these 2 countries come out of the ice age..and we are headed into one..simple as that.

May 07 2012 at 8:11 PM Report abuse +1 rate up rate down Reply
lylenpat

Why should the French electing a socialist for their leader have anything to do with our stock market falling. Remember people, we are in the midst of a socialistic take over in this country. TAX TAX TAX, no body has heard of don't spend what you ain't got.

May 07 2012 at 7:48 PM Report abuse -1 rate up rate down Reply
1 reply to lylenpat's comment
Mike

Because it's all about the failing countries in the Eurozone. There is (supposedly) a wider swath of devastation incurred if any of these countries go down. I'm sure the bankers have bigger exposure than they should. What they don't realize is the same thing that is being said of individuals. You don't take away from the stronger and make them weaker. Ultimately, everybody will fail. Same with countries. France's new guy is not just going along with bailing out the failing EZ countries. And frankly, even though I think a Socialist is going to ruin that country as well, I happen to agree. France was doing well. Now, they just got a debt downgrade. Germany probably should be running for the hills too. I guess one of the biggest problems is the world economy. You have customers world-wide. You can just lose them in the fog. We're doomed. US heading there shortly. If Obama gets re-elected, it's game over. I'm not even sure Romney can stop it, but it's a sure bet if Obama gets re-elected. This guy doesn't even know the meaning of the word "budget".

May 07 2012 at 8:54 PM Report abuse rate up rate down Reply