--U.S. markets slipping after strong rally Monday
--Moody's downgrade to France's credit rating weighing on
markets
--Asian markets slip after Bank of Japan holds monetary policy
intact
By Patrick McGee
NEW YORK--U.S. stock futures are in a modest retreat Tuesday
ahead of housing starts data, after shares rallied strongly to
begin the week.
Investor enthusiasm waned after France was stripped of its AAA
status late Monday by Moody's Investors Service.
About 90 minutes ahead of the open, Dow Jones Industrial Average
futures fell 20 points, or 0.2%, to 12718.
Standard & Poor's 500-stock index futures fell two points,
or 0.1%, to 1380.60, and Nasdaq 100 futures fell 0.50 points, or
0.1%, to 2584. Changes in stock futures don't always accurately
predict stock moves after the opening bell.
On Monday, the Dow climbed 207.65 points, or 1.7%, marking its
biggest one-session rise since Sept. 6. The S&P 500 gained
27.01 points, or 2%, and the Nasdaq jumped 62.94 points, or
2.2%.
Moody's, following in the footsteps of Standard & Poor's in
January, downgraded France's credit to Aa1, citing the country's
struggling fiscal outlook coupled with "structural challenges,
including its gradual, sustained loss of competitiveness and the
long-standing rigidities of its labor, goods and service
markets."
French bond yields, which move inversely to price, were modestly
higher.
Data on new residential construction during October is due out
at 8:30 a.m. EST. The median estimate of economists surveyed by Dow
Jones Newswires is for a monthly decline of 4.5% to a seasonally
adjusted annual rate of 833,000. Also at 8:30 a.m., housing permits
are seen slipping 3.4% to an annualized annual rate of 860,000.
In corporate news, shares of Dow component Hewlett-Packard (HPQ)
fell 9.4% in premarket trading after the technology company
reported fiscal fourth-quarter revenue of $30.0 billion, down 7%
from the prior year. The company generated $4.1 billion in
operating cash flow and returned $384 million to shareholders in
share repurchases and dividends.
European markets declined modestly after the Moody's downgrade,
with the Stoxx Europe 600 falling 0.1% to 268.23. Also weighing on
the markets is anticipation over the latest word on Greek aid from
the euro-zone finance ministers' meeting in Brussels.
Asian markets slipped as investor focus shifted to uncertainty
in Europe. Japan's Nikkei Stock Average lost 0.1% to 9142.64,
breaking a four-session upward streak after the Bank of Japan left
monetary policy unchanged. China's Shanghai Composite shed 0.4% to
2008.92.
December crude oil futures fell 0.2% to $89.09 a barrel, while
November gold futures were down 0.1% to $1,733.20 an ounce. The
dollar gained against the euro and against the yen.
In other corporate news, shares of H.J. Heinz Co.'s (HNZ) rose
0.3% after fiscal second-quarter profit jumped 22% thanks to growth
in emerging markets. Heinz has said it expects fast-growing
emerging markets to make up roughly a quarter of its sales this
year.
-Write to Patrick McGee at patrick.mcgee@dowjones.com