After weekend French and Greek elections, investors are now expressing their own right to vote on Monday morning -- and they're showing a strong preference for bear candidates: Global indexes fell on concerns that an anti-austerity backlash is sweeping Europe, raising concerns about the next phase of the region's sovereign-debt crisis.
U.S. index futures were down with about 90 minutes before markets open, suggesting that stocks will fall at the start of trading. Futures for the Dow Jones industrial average were down 54 points or 0.4 per cent. Futures for the broader S&P 500 were down 7 points or 0.5 per cent.
In Europe, Germany's DAX index was down 0.6 per cent and France's CAC index was down 0.3 per cent. In Asia, Japan's Nikkei 225 fell 2.8 per cent in overnight trading.
The moves follow French presidential elections, which saw incumbent Nicolas Sarcozy lose to socialist Francois Hollande, raising uncertainties about how the new leader will deal with pressure to cut spending and to what extent he will cooperate with Germany in leading the euro zone along a path toward austerity. Elections in Greece also showed an austerity backlash, with voters rejecting the country's two main incumbent political parties.
Despite the reaction from the stock market, these election results hardly came as a surprise. Much of Europe is now sliding back into recession, with many observers arguing that government cutbacks during times of weak economic growth are hurting -- not helping -- the region's economic health. The situation in the United States has also been raising concerns, with the country's labour market stalling after gains earlier in the year. A disappointing monthly payrolls report from the U.S. Labor Department sent the Dow down 1.3 per cent on Friday.
On Monday, commodity prices followed stocks. Crude oil fell 0.6 per cent, to $97.86 (U.S.) a barrel. Gold fell 0.4 per cent, to $1,640 an ounce.
David Berman