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Selloff in Asia Points to Lower Open
Monday March 5, 7:04 am ET
By Tim Paradis, AP Business Writer
Stocks Head Toward Lower Open Following Selloff in Asia, Europe


NEW YORK (AP) -- Wall Street appeared headed for a lower opening Monday as stock markets around the world suffered further selloffs.
The overseas pullback, in which Japan's Nikkei stock average saw its biggest one-day drop since June, resembled the selling that triggered the recent unease in world markets last Tuesday.





The weekend respite appeared to do little to ease concerns about losses over soured loans by subprime lenders. HSBC Holdings PLC, Europe's largest bank, on Monday said its 2006 profits rose 5 percent but that it booked $10.6 billion on losses on bad loans from its U.S. subprime mortgage operations.

A rising yen stoked further concern about an erosion in the yen carry trade, which refers to the process of borrowing yen to acquire assets with greater yields in other currencies. A slowdown could hurt liquidity worldwide. On Monday, the U.S. dollar fell to about 115 yen from above 120 yen less than a week ago.

Dow Jones industrials futures fell 93 points, or 0.82 percent; Nasdaq 100 futures slipped 15.2 points, or 0.58 percent, and Standard & Poor's 500 index futures fell 10.3 points, or 0.84 percent.

After sharp declines last week, the major indexes are now lower for the year, with the Dow down 3.3 percent, the Standard & Poor's 500 index down 4.4 percent and the Nasdaq composite index lower by 5.9 percent.

Drops in Asia and Europe appeared to leave U.S. investors unnerved. The Nikkei closed down 3.3 percent, Hong Kong's Hang Seng index fell 4 percent and the Shanghai Composite Index, which has proven volatile in recent weeks, fell 1.6 percent. In Europe, the major indexes were down by more than 1 percent.

Wall Street begins the week with little economic data that could perhaps ease concerns among U.S. investors about the stamina of the U.S. economy. One noteworthy report due, however, is from the Institute for Supply Management, which is scheduled to report its index on the services sector. The market is expecting the reading on the largest slice of the economy to come in at 57.5, down slightly from 59.0 in January.

Investors will also be keeping tabs on the moves of U.S. Treasury Secretary Henry Paulson, who began a three-nation Asian tour in Tokyo on Monday.