NEW YORK (AP) — Stock futures fell Monday amid fresh concerns that a bailout package for Greece wouldn’t take shape in time for the country to avoid running out of money to pay its debts. The declines come in the wake of Wall Street’s best week in months.
European finance ministers said Friday they would delay authorizing a new installment of emergency funds for Greece until October. Investors fear that the country will fail to convince its lenders that it can pay its debts.
The Greek cabinet will meet to devise new austerity measures, but the country risks not qualifying for an $11 billion installment of the bailout package it received last year, as well as a second bailout worth $149 billion.
If Greece were to default on its debt, other debt-laden European countries would likely be judged less credit-worthy and have difficulty obtaining loans. A crisis such as that could ripple through the global banking system and put the brakes on a U.S. economic recovery.
Uncertainty about a Greek bailout hit global stocks hard on Monday. In Europe, Germany’s DAX fell 2.9 percent in midday trading. France’s CAC-40 fell 2.8 percent, and the FTSE 100 index of leading British shares fell 1.9 percent.
Later on Monday, President Barack Obama is expected to discuss his deficit-reduction proposal that includes $1.5 trillion in new taxes. The proposal has been met with opposition by House Speaker John Boehner, who has said his party won’t accept any tax increases to lower deficits. Monday’s speech marks the start of a negotiation over how to reduce the deficit that is likely to be contentious.
Forty-five minutes ahead of the market open, Dow Jones industrial average futures fell 159 points, or 1.4 percent, to 11,287. Standard & Poor’s 500 futures fell 20, or 1.7 percent, to 1,191. Nasdaq 100 futures fell 36, or 1.6 percent, to 2,271.
Last week, stocks rose for the longest stretch in 2 1/2 months as investors grew hopeful that a resolution to Greece’s debt crisis was near.
On Friday, The S&P 500 rose 6.90, or 0.6 percent, to 1,216.01. The Dow rose 75.91 points, or 0.7 percent, to 11,509.09. The Dow jumped 186 points Thursday, its biggest gain of the week, after five central banks said they would act together to support European lenders with unlimited dollar loans. The Nasdaq added 15.24, or 0.6 percent to 2,622.31.
Still, investors were disappointed by the decision Friday by officials from countries that use the euro to put off a decision on whether Greece will qualify for its next round of bailout money. Investors had hoped for a speedier solution.