Stocks point lower as overseas markets fall

U.S. investors joined traders overseas in worrying that a three-month surge in stocks might be overdone.

Stocks fell in Europe and Asia on Monday, sending U.S. stock futures lower. Futures extended their slide after an index of manufacturing in New York indicated that demand weakened in June from May.

The drop comes as the Standard & Poor’s index is up 39.9 percent since skidding to a 12-year low on March 9. The market’s advance slowed last week as traders looked without much success for fresh signs the economy was strengthening.

The dollar rose against other most other major currencies following comments from Russia’s finance minister. The stronger dollar pushed down oil prices. A run-up in oil has helped lift energy and materials stocks in recent weeks.

Overseas, Japan’s Nikkei stock average fell 1 percent. In afternoon trading, Britain’s FTSE 100 fell 1.7 percent, Germany’s DAX index 2.2 percent, and France’s CAC-40 1.7 percent.

The main index from New York Federal Reserve’s Empire State Manufacturing Survey fell 5 points in June to a negative 9.4. New orders remained negative and near May’s level. But indexes looking further ahead continued to rise, which indicates conditions should improve during the next six months. Capital spending and technology spending measures turned positive for the first time since October.

Dow Jones industrial average futures fell 95, or 1.1 percent, to 8,695. Standard & Poor’s 500 index futures fell 10.70, or 1.1 percent, to 930.00, while Nasdaq 100 index futures fell 14.50, or 1 percent, to 1,471.00.

Russia’s finance minister, Alexei Kudrin, said during a weekend meeting of G-8 finance ministers in Italy that the dollar’s status as the world’s main reserve currency wasn’t likely to change soon. He has been one of those in the Russian administration raising concern about the dollar in recent months.

The dollar was higher against most other major currencies, while gold prices fell.

Light, sweet crude fell 46 cents to $71.58 per barrel in electronic trading on the New York Mercantile Exchange.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.76 percent from 3.80 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.17 percent from 0.16 percent Friday.

Investors are also getting more specifics on Washington’s plans for the biggest overhaul of the financial system since the Great Depression. Among the proposals, the Federal Reserve would have authority over the largest financial institutions whose failure could jeopardize the entire financial system.

Treasury Secretary Timothy Geithner and President Barack Obama’s chief economic adviser, Lawrence Summers, outlined the White House proposal in an article Monday in The Washington Post.

The proposed changes to the oversight of the financial system come as investors are still trying to determine when and how the economy will emerge from the recession that began in December 2007.

The weekend’s G-8 meeting offered investors little to go on. Finance ministers said they saw signs economies were stabilizing but said it was too soon to remove the supports of fiscal and monetary stimulus.