By msnbc.com news services
Wall Street is set to tumble at Tuesday?s open, extending a drop in global equities, after doubts about the ability of Europe to tackle its debt crisis sent Italy?s bond yields back into a perceived danger zone.
Prime Minister-designate Mario Monti is meeting the leaders of Italy?s biggest two parties to discuss the ?many sacrifices? needed to reverse a collapse in market confidence as the yield on Italy's 10-year benchmark bond leaped above 7 percent.
European stocks fell 1.5 percent in early trading, adding to the previous session's drop, and following on from weakness in Asian markets overnight, where Tokyo's Nikkei 225 closed down nearly 1 percent.
?The danger is -- and the markets are keenly aware of this -- that this crisis, like most, turn on a dime and can blow up very, very quickly,? said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York.
?As long as the (European Central Bank) continues to be unwilling to become the lender of last resort and really pull out the bazooka you are going to continue to see these scares.?
Bond prices in other European nations also rose sharply. In France and Austria, yields on the benchmark 10-year both hit 3.6 percent. The rise in the yields of countries that were until recently thought to be more isolated from the crisis is creating new worries of a wider conflagration in European debt markets.
In the latest earnings reports, Home Depot reported stronger-than-expected results. Wal-Mart Stores also reported results early Tuesday.
On the economic front, the Commerce Department will release October retail sales data later Tuesday. Economists expect an increase of 0.3 percent in October versus a 1.1 percent rise in September.
Also, the Labor Department will release the October Producer Price Index. Economists forecast a fall of 0.1 percent versus a 0.8 percent rise in September. Excluding volatile food and energy items, PPI is expected to rise 0.1 percent versus a 0.2 percent increase in the prior month.
Reuters contributed to this report.
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