May 30, 2012-Stocks Trade Lower on Euro Zone Concerns

The major U.S. index futures are pointing to a lower opening on Wednesday, with sentiment weighed by fears concerning the situation in Europe. Fears that the Spanish financial system is on the verge of collapse could keep sentiment subdued. The risk aversion set in motion by the fears has triggered selling in risky bets such as commodities, while the euro is also extending its weakness. Meanwhile, the European Commission has suggested that the eurozone bailout fund may be allowed to directly recapitalize sick financial institutions of the region. The markets may also focus on the pending homes sales report due after the markets open. U.S. stocks advanced on Tuesday, as optimism about the global economy gained ground amid speculation of additional Chinese stimulus and developments in Greece that suggested that the nation’s position in the eurogroup may be secured. The major averages opened higher and sustained the buying momentum despite a report showing a decline in consumer confidence reading. Although stocks gave back some of their gains, the averages moved back to the upside in the afternoon but finished off their highs.