Yahoo climbs in premarket trading; European, Asian markets drop By Simon Kennedy, MarketWatch LONDON (MarketWatch) — Wall Street looked set to start the fourth quarter on the back foot Monday as stock-market futures dropped following the news that Greece will miss its deficit target for the year, though bid hopes lifted Yahoo Inc. in premarket trading. Futures on the Dow Jones Industrial Average DJ1Z -0.66% dropped 28 points to 10,813 and those on the Standard & Poor’s 500 index SP1Z -0.67% were down 3 points at 1,123. Nasdaq 100 futures ND1Z -0.88% fell 12.5 points to 2,122. The losses for futures came after heavy selling on Friday helped the major U.S. indexes record their worst quarter since the height of the financial crisis. The Dow Industrials closed down nearly 241 points on Friday and dropped 12% over the course of the quarter. European and Asian markets started the fourth quarter deep in the red Monday, led by a 5.3% fall for the Hang Seng Composite HK:HSI -4.38% in Hong Kong amid fears about cracks in the Chinese economy. The German DAX 30 index DX:DAX -3.09% dropped 2.5% in Frankfurt after Greece warned that it won’t meet its deficit target for 2011 or 2012. The beleaguered country’s deficit is now expected to be 8.5% of gross domestic product in 2011 — significantly higher than the 7.6% target. Read more on the Greece's deficit miss. The euro edged down against the dollar, falling 0.1% to $1.3354 as the dollar index DXY +0.34% rose 0.1% to 78.84. The safe-haven attractions of precious metals helped lift gold and silver prices. The December gold contract GC1Z +2.16% gained $34.50, or 2.1%, to $1,656.80 an ounce in electronic trading on the Globex market. Economic reports On the data front Monday, the Institute for Supply Management’s factory index for September is due at 10 a.m. U.S. Eastern, alongside figures on construction spending for August from the Commerce Department. Economists polled by MarketWatch are expecting the ISM survey to remain unchanged at 50.6, while construction spending is seen down 0.3%, compared with a 1.3% drop in July. “Today’s manufacturing ISM report will be the main focus from a data perspective, and as long as it holds above 50 should be risk-supportive, and consequently probably dollar-negative,” said Lloyds Corporate Markets strategist Adrian Schmidt in a note to clients. Among stocks to watch, shares in Yahoo Inc. YHOO +3.87% rose 5.5% in premarket trading. A weekend report in The Wall Street Journal said Chinese Internet firm Alibaba Group Holding Ltd. ALBCF -2.69% could be interested in buying the company. The report cited comments made by Alibaba Chief Executive Jack Ma to an audience at Stanford University. S1 Corp. SONE +0.98% was also up 5% in premarket trading at $9.63 after it reached a deal to be acquired by ACI Worldwide Inc. ACIW -2.82% in a cash-and-stock deal valued at $9.55 a share at Friday’s closing prices. Simon Kennedy is the City correspondent for MarketWatch in London.

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