Dow May Gain as Spanish Banks Are Downgraded

LONDON -- The Dow Jones Industrial Average (INDEX: ^DJI  ) looks set to open a fraction higher this morning following yesterday's 138-point tumble. During early pre-open trading, the futures market indicated the benchmark U.S. index would start the session with a gentle 0.3% recovery.

On the domestic front, the Case-Shiller home-price index for April and the Consumer Board's consumer index for June could provide mixed news for today's traders. The previous two Case-Shiller reports have shown month-on-month gains -- the best run since 2010 -- although the figure from the Consumer Board is expected to stay around a five-month low.

Among individual stocks, News Corp (Nasdaq: NWS  ) could be active at the open, following reports chairman Rupert Murdoch may split his media business into separate publishing and entertainment companies. News Corp's Australian-traded shares rallied 2% overnight on the rumors.

General trading today may be led by Europe, where indexes started higher but were trading by as much as 0.5% lower later in the session. The renewed selling appeared as the Mediterranean island of Cyprus joined the queue of European nations asking for a bailout.

The decision by Moody's Corporation to downgrade 28 Spanish banks did not help sentiment. The ratings agency now reckons at least a dozen banks in Spain have "junk" status due to the country's economic difficulties and property-market slump. Banco Santander lost 0.3%, while Banco Bilbao Vizcaya Argentaria slipped 0.7% on the finer details.

In the U.K., the FTSE 100 (INDEX: ^FTSE  ) kept broadly flat as government figures showed the British economy moving further into the red. During May, tax receipts fell 7% year on year, while public spending increased by 8%. A notable FTSE casualty today was Royal Bank of Scotland (NYSE: RBS  ) , which slid 3% as ongoing software problems continued to plague millions of customers.

Among other European movers, Finnish handset manufacturer Nokia (NYSE: NOK  ) extended yesterday's 11% plunge with a further 1% loss this morning. Monday's fall was prompted by reports of Microsoft developing its own smartphone. Following a catalog of awful results this year, Nokia's shares currently trade at levels last seen in 1994.

However, Nokia is not the European blue chip that has attracted stock-picking supremo Warren Buffett to invest more than $1 billion. The legendary investor recently bought a famous European name with global expansion potential. And, like Nokia, it too has suffered this year and seen its share price slump. You can discover the identity of Buffett's purchase and the price he paid in this special free report.

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Maynard Paton owns no shares of the companies mentioned. The Motley Fool owns shares of Microsoft. Motley Fool newsletter serviceshave recommended buying shares of Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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