Stock futures fall ahead of open; euro falls to 4-year low on ongoing economic worries

Stock futures retreat ahead of opening

NEW YORK — Stock futures retreated Monday as investors remain cautious about the health of Europe’s economy.

Futures were also hurt by a disappointing regional manufacturing report and an outlook from Lowe’s Cos. that fell short of expectations.

The euro, used by 16 countries in Europe, fell to a four-year low, though major European stock indexes rose. Investors are grappling with whether severe budget cuts in countries like Greece, Spain and Portugal will hinder a long-term economic recovery in Europe.

The austerity measures are being implemented as part of a nearly $1 trillion bailout program the European Union and International Monetary Fund agreed to last week. The rescue package provides European countries facing mounting debt problems access to cheap loans.

The euro fell to as low as $1.2237 early Monday before rebounding slightly to $1.2333.

The plunging euro has been driving trading around the globe in recent days. The weakness in the euro has helped boost the value of safe-haven investments like the dollar, Treasurys and gold. It has also driven oil sharply lower.

Oil prices briefly fell below $70 a barrel for the first time since February. Oil is priced in dollars so a stronger dollar deters investment in oil.

Ahead of the opening bell, Dow Jones industrial average futures fell 28, or 0.3 percent, to 10,581. Standard & Poor’s 500 index futures fell 2.60, or 0.2 percent, to 1,132.70, while Nasdaq 100 index futures dropped 5.75, or 0.3 percent, to 1,904.00.

Investors looking for signs of an improving domestic economy received mixed data. Lowe’s reported a better-than-expected first-quarter profit and raised its guidance for the year. But the outlook was shy of analysts’ expectations, which sent shares lower in pre-market trading. Lowe’s shares dropped $1.05, or 4 percent, to $25.02 ahead of the opening bell.

The home-improvement retailer’s results were the first in a line of retailers that are reporting quarterly profits this week. Home Depot Inc., Wal-Mart Stores Inc. and Target Corp. also all release results in the coming days.

Strong profits normally boost the market, but just as important now are corporate outlooks. Sustained growth in consumer spending is considered vital to a strong, long-term economic rebound.

The Empire State manufacturing index also disappointed traders. The index, which measures manufacturing activity in the New York region, plummeted to 19.11 this month from 31.86 in April. Economists polled by Thomson Reuters, on average, had forecast a reading of 30.00 for May.

Acquisition activity had provided a boost to futures earlier in the morning. Universal Health Services Inc. agreed to buy Psychiatric Solutions Inc. for about $2 billion in cash. Japan’s second largest drug maker, Astellas Pharma Inc. agreed to purchase U.S. cancer drug company OSI Pharmaceuticals Inc. for $4 billion in cash.

Traders see dealmaking as a sign of economic recovery because it means businesses are more comfortable spending reserves to expand their operations.

Stocks remained extremely volatile last week as investors first cheered the European bailout program before becoming skittish about how it would affect the continent’s economy. The Dow tumbled 163 points Friday as the euro plummeted and declining oil prices hurt energy companies.

Bond prices rose Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.44 percent from 3.46 percent late Friday.

Gold rose $2.30 to $1,230.10 an ounce.

Oil for June delivery fell 34 cents to $71.27 a barrel. It fell as low as $69.82 earlier in the day.

Overseas, Britain’s FTSE 100 rose 0.5 percent, Germany’s DAX index gained 0.7 percent, and France’s CAC-40 rose 0.1 percent. Japan’s Nikkei stock average fell 2.2 percent.