In Focus: Eurozone Finance Ministers Meeting

U.S. futures indicate a decline in stock prices on Wall Street today due to profit-taking after strong gains last week, as well as ahead of the Eurozone finance ministers meeting.

The Dow Jones futures index was down 11 points at 2:00 PM, while the tech-heavy Nasdaq was down 7 points. At the same time, the S&P 500 futures index weakened by 3.2 points and was below fair value, a mathematical formula that determines prices taking into account interest rates, dividends, and the maturity of the futures contract. Eurozone finance ministers are gathering in Brussels today to discuss ways to stabilize the monetary union and avoid new costly bankruptcies of member states. Two senior European officials have called for the creation of new pan-European bonds, while others are seeking ways to strengthen the financial rescue fund for states, valued at 750 billion euros.

According to an IMF report cited by Reuters, IMF chief Dominique Strauss-Kahn will urge ministers to increase the fund intended to assist debt-stricken members and request the European Central Bank to increase the purchase of government bonds to curb the spread of the debt crisis. Meanwhile, Moody’s has downgraded Hungary’s rating by two notches, warning that the budgetary policies of the local government are inadequate in the long term. In such conditions, the dollar has recovered some of the losses recorded last week against the euro, which is now trading at 1.3357 dollars.

“The U.S. has shown that extremely strong actions need to be taken to overcome the threat of spreading financial crisis. It seems that Europe has only covered two-thirds of the way, and some are now hoping that it could adopt a comprehensive plan to prevent the crisis,” says Rick Meckler, CEO of investment firm LibertyView Capital Management. Somewhat over the weekend, investor optimism was boosted by statements from Fed Chairman Ben Bernanke that the central bank is prepared to purchase more than 600 billion dollars worth of government bonds in the next eight months, should it prove necessary to stimulate economic growth. This could attract a flow of money from Asian markets as investors seek higher yields. On European exchanges, the major indices have dipped slightly into the red. The London FTSE index is currently down 0.1 percent, at 5,739 points, the Frankfurt DAX is down 0.2 percent, at 6,934 points, and the Paris CAC is down 0.5 percent, at 3,729 points. (H)