Stocks to slip on Greece turmoil

By CNNMoney staff @CNNMoneyInvest May 16, 2012

NEW YORK (CNNMoney) -- U.S. stock futures hovered around breakeven Wednesday morning, as the political uncertainty in Greece continues ahead of several U.S. economic reports and corporate earnings.

The Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were were slightly lower Wednesday morning. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

After politicians in Greece failed to agree on a coalition government, President Karolos Papoulias called for all parties to meet Wednesday to set up a caretaker government that willconduct new elections. The instability in Athens raised questions as to whether the country would be forced to leave the eurozone and what such a move would mean for other troubled European economies.

Those contagion fears sent bond prices lower once again in Italy and Spain, increasing their cost of borrowing further.

U.S. stocks closed at three-month lows Tuesday as the eurozone debt crisis continued to take a toll on the markets.

Contagion risks deepen

World markets: European stocks slipped into the red during morning trading. Britain's FTSE 100 (UKX) fell 0.9%, the DAX (DAX) in Germany slid 0.8% and France's CAC 40 (CAC40) edged lower 0.4%.

Asian markets ended lower. The Shanghai Composite (SHCOMP) fell 1.2% and Japan's Nikkei (N225) dropped 1.1%, while the Hang Seng (HSI) in Hong Kong plunged 3.2%.

Economy: Investors will get reports on the housing market before the opening bell Wednesday, followed by crude inventories after the open, followed by the latest Fed minutes in the afternoon.

The Mortgage Bankers Association's mortgage index is the first report on tap, followed by the government reports on housing starts and building permits for April.

Housing starts are expected to rise to 680,000 from 654,000 in March, according to analysts surveyed by Briefing.com. Meanwhile, building permits are expected to have fallen from 747,000 to 730,000.

The Fed's reading on activity at the nation's factory is due at 9:15 a.m. ET, with economists forecasting that industrial production rose 0.5% in April after being unchanged the previous month.

The latest report on crude inventories will be released at 10:30 a.m. ET, and minutes from the April meeting of the Federal Open Market Committee will be issued at 2:00 p.m. ET.

Companies: Shares of retailer JC Penney (JCP, Fortune 500) tumbled nearly 12% in after-hours trading, after it reported a much bigger than expected 39 cent a share loss for the most recent quarter -- far worse than the 11 cent loss forecast by analysts surveyed by Thomson Reuters, or the 30 cents a share profit it made a year ago. The company also discontinued its dividend.

Deere & Co. (DE, Fortune 500) will report quarterly results before the opening bell. The company is expected to report earnings per share of $2.54 on revenue of $9.6 billion.

Office supply company Staples (SPLS, Fortune 500) is slated to report earnings of 30 cents per share, up 2 cents over the same period last year. The company is expected to show revenue of $6.2 billion.

Meanwhile, Target Corp.'s (TGT, Fortune 500) earnings per share are expected to hit $1.01 on $16.8 billion in revenue.

JPMorgan Chase (JPM, Fortune 500) shares edged higher Tuesday as the bank held its annual shareholder meeting in Tampa, Fla., but the stock is still down more than 12% over the previous five trading sessions.

Shareholders approved pay packages for the bank's top executive, and affirmed their wishes to keep Jamie Dimon in the dual role of chairman and CEO.

And according to documents filed with the SEC, Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500) built new positions in General Motors (GM, Fortune 500) and Viacom (VIA) during the first three months of 2012.

The investment fund now holds holds roughly 10 million shares in General Motors and 1.6 million shares of Viacom.

Keystone isn't the only pipeline

Currencies and commodities: The dollar was stronger against the euro, the British pound and the Japanese yen.

Oil for June delivery fell $1.58 to 92.40 a barrel.

Gold futures for June delivery lost $20.40 to $1,536.70 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged higher, pushing the yield down to 1.78% from 1.79% late Tuesday.