U.S. Stocks to Open Lower on European Debt Fears

U.S. stocks are set to fall sharply at the open Monday, following a global sell-off on heightened fears that Spain will need a full sovereign bailout similar to those taken by Greece and Portugal, and concern that Greece will not fulfill its bailout commitments and will leave the eurozone. Also, a Chinese policymaker warned that the nation’s economic expansion may cool for a seventh-straight quarter.

Dow Jones industrial average, S&P 500 and Nasdaq futures are all down a little more than 1%.

The yield on the 10-year Spanish bond rose to a euro-area record high of 7.565% late Friday, while the 10-year Italian yield increased to 6.356%. The German 10-year yield sank to a record low of 1.127% and the U.S. 10-year Treasury yield fell to an all-time low of 1.405%.

Asian markets ended sharply lower. The Shanghai Composite fell 1.3%, the Hang Seng in Hong Kong ended 3% lower and Japan’s Nikkei dropped 1.9%.

In Europe, Britain’s FTSE 100 and the DAX in Germany dropped about 1.7% and France’s CAC 40 fell about 2%.

McDonald’s (NYSE: MCD) is expected to report earnings of $1.38 a share on $6.95 billion in revenue when it reports this morning. Halliburton (NYSE: HAL) reported an adjusted second-quarter profit of $0.80 a share, while revenue rose to $7.23 billion, both numbers exceeding analysts’ expectations.