Investors are also keeping an eye on France to see how elections over the weekend will play out. Socialist Francois Hollande won 28.6% of the vote in the first round of the presdiential election, compared with 27.1% for President Sarkozy. Hollande favors a tax on financial transactions and renegotiating Europe’s fiscal accord. Markets are down sharply in Europe, with the FTSE 100 lower by 1.8%, the DAX down 2.9%, and the CAC 40 off by 2.2%.
Also, this morning, Pfizer (PFE) is reportedly selling its baby food business to Nestle SA for more than $10 billion. Shares of PFE are down 0.75% in early trade. This morning, ConocoPhillips (COP) and Xerox (XRX) report earnings.
Treasury yields are falling this morning in conjunction with a drop in equities. Prices on the 30-year bond and 10-year note are up 0.6% and 0.3%, respectively. The US$ is also stronger, gaining nearly 80 pips against the EUR (1.3130) and 40 pips against GBP (1.6080). USD/JPY has sunk to near session lows, trading at 81.10 ahead of the U.S. open. Gold is trading 0.7% lower, and Crude Oil futures are down 0.9%.
No economic data will be released this morning in the U.S. On Friday, the first estimate of Q1 GDP will be released.