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U.S. stocks were headed for an early sell-off Monday, taking cues from world markets, which tumbled after rating agencies downgraded Greece and Italy late last week.
On Friday, rating agency Fitch cut Greece's credit rating by three notches to "highly speculative," putting it in junk bond territory. In addition, Standard & Poor's slashed Italy's outlook to 'negative' from 'stable.' These downgrades, combined with a weaker-than-expected reading on manufacturing in Europe released Monday, renewed concerns about the eurozone's debt crisis.
Furthermore, Spain's socialist ruling party was hit with the worst election defeat in years over the weekend, as citizens continued to protest the weak economy and high unemployment.
Companies: Shares of entertainment products maker Sony (SNE) slipped nearly 3% in premarket trading. The company posted a $3.19 billion annual loss and cut its full-year earnings outlook, to reflect damages of the earthquake and tsunami in Japan.
Shares of Krispy Kreme (KKD) jumped more than 9% in premarket trading, after the doughnut maker beat earnings per share by 4 cents on strong sales.
Oil for July delivery fell $2.50, or more than 2%, to $97.60 a barrel.
Gold futures for July delivery slipped 90 cents to $1,508.50 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury jumped, pushing the yield down to 3.11% Monday from 3.15% late Friday.
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