Wall Street to open lower on Greece woes, Dell outlook

Wall Street to open lower on Greece woes, Dell outlook

Reuters

NEW YORK (Reuters) - Wall Street was set for a lower open on Wednesday on mounting concerns over Greece's future in the euro zone and as a weaker-than-expected revenue forecast from computer maker Dell weighed on investor sentiment.

Euro zone officials have agreed that each euro zone country must prepare an individual contingency plan in the eventuality that Greece decides to leave the single currency area. The agreement was reached during a teleconference of the Eurogroup Working Group, which lasted for about an hour on Monday.

Dell Inc shares fell 14 percent to $12.97 in premarket trade, a day after the company forecast disappointing second-quarter revenue as U.S. and European corporate tech spending weakens and consumer personal computer sales continue to shrink.

Fears that Greece may have to leave the euro had grown in the market after Dow Jones earlier quoted former prime minister Lucas Papademos as saying Greece had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone. His clarification in a television interview later offered little respite.

The "ex-Greek PM was just stating the obvious to anyone paying attention over the past month since the election. He doesn't want Greece leave but it could happen and it would be ugly if it did," said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.

"This said, the markets are on edge and sensitive to every possible out of control scenario coming out of Europe."

Facebook Inc will also be eyed, after sources said that while company officials traveled the country to talk up the company's $16 billion initial public offering, the social networking giant advised analysts for underwriters to reduce revenue and earnings forecasts. The stock was up 1.6 percent to $31.52 in premarket trade.

S&P 500 futures lost 10.5 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 79 points, and Nasdaq 100 futures fell 14.75 points.

Ariba Inc will also be in the spotlight after top European software company SAP AG said it plans to buy Ariba in a deal valuing the business and commerce network company at $4.3 billion, its latest maneuver against Oracle in the fast-growing Internet-based computing market.

Wells Fargo & Co does not employ the same kind of hedging strategy that has triggered a trading loss of at least $2 billion at rival JPMorgan Chase & Co, the bank's chief risk officer said on Tuesday.

PetSmart Inc posted a better-than-expected quarterly profit and raised its full-year outlook on strong sales across all its product categories, sending its shares up 8 percent in after-market trade.

On the macro front, investors awaited home price index for March, due at 10:00 a.m. ET (1400 GMT), as well as new home sales for April, also due at 10:00 a.m. ET.

Stocks closed mostly flat on Tuesday after volatility late in the session, with weakness in materials and energy shares offsetting strength in financials.

(Reporting By Angela Moon, editing by Dave Zimmerman)