Global stocks on Monday were set to step back from a recent rally, with high oil prices and the European debt crisis weighing on sentiment.
U.S. index futures were down with about two hours before markets open, suggesting that stocks will fall at the start of trading. Futures for the Dow Jones industrial average were down 52 points or 0.4 per cent. Futures for the broader S&P 500 were down 6 points or 0.5 per cent. Although the Dow fell slightly on Friday, the S&P 500 hit its highest level since 2008, amid upbeat signals on the U.S. economy and relatively little dour news out of Europe.
However, there are concerns now that the International Monetary Fund might not have the necessary financial firepower to deal with additional European emergencies. At a weekend meeting, the Group of 20 failed to come to an agreement to boost funding for the IMF, with some participants arguing that European leaders must first increase the size of their own bailout funds.
In Europe, the U.K.'s FTSE 100 fell 0.9 per cent and Germany's DAX index fell 1.1 per cent in afternoon trading. In Asia, Japan's Nikkei 225 fell 0.1 per cent in overnight trading.
High oil prices are also starting to weigh on stocks. Crude oil recently hit its highest level since May, with tensions over Iran's nuclear ambitions threatening to choke off exports from the oil producer. High oil prices threaten some consumer discretionary stocks and transport stocks. However, on Monday, oil did settle back slightly, falling to $108.52 (U.S.) a barrel in New York, down 1.1 per cent.
Gold also retreated from recent highs, falling to $1,768 an ounce, down 0.5 per cent.
