Fed chairman to testify on the U.S. economic outlook Tuesday By Polya Lesova, MarketWatch LONDON (MarketWatch) — U.S. stock futures dropped Tuesday, pressured by worries about Greece’s ability to avoid a debt default, as investors awaited comments on the American economy by the Federal Reserve’s chairman. Futures on the Dow Jones Industrial Average DJ1Z -0.49% fell 71 points to 10,458 and those on the Standard & Poor’s 500 stock index SP1Z -0.81% dropped 7.2 points to 1,079.10. Nasdaq 100 futures ND1Z -0.53% declined 10.5 points to 2,054.70. The blue-chip Dow index DJIA -2.36% fell 2.4% on Monday to post its lowest close since September 2010. European equity markets fell sharply Tuesday after euro-zone finance ministers signaled last night that they will take a decision on whether to disburse more aid to Greece later in October than previously suggested. The ministers also indicated that private bondholders may have to take bigger losses on debt holdings as part of the second Greek bailout. The news — which came after the Greek government admitted Sunday that it won’t meet its deficit-reduction targets — only served to escalate worries that Greece may default on its obligations. Read more on Greece. Dexia Germany’s DAX 30 index DX:DAX -3.38% fell 3.4% in midday trade, while the euro was steady at $1.3190 after sinking Monday. Shares of Dexia BE:DEXB -21.54% dropped nearly 17% in Brussels on fears the French-Belgian bank may be split up. Dexia said in a statement that the size of its non-strategic portfolio of assets is having a harmful structural impact on the group. In addition to the euro-zone debt crisis, investors will watch closely Tuesday’s testimony on the economic outlook by Fed Chairman Ben Bernanke before the Joint Economic Committee starting at 10 a.m. U.S. Eastern time. The Fed chief may face questions about the effectiveness of its so-called Operation Twist, in which it swaps short-maturity bonds for longer-maturity securities, as well as about the sluggish economic recovery and about U.S. bank exposure to Europe. Data on U.S. factory orders for August are also due later Tuesday. Apple’s new iPhone On the corporate front, Apple Inc. AAPL +0.11% is likely to steal the spotlight Tuesday with its event in California, where it’s expected to unveil its latest iPhone. More than 55 million iPhones were shipped in the first nine months of the company’s current fiscal year, accounting for 45% of total company revenue for that time. Read more on Apple. In premarket trade, shares of UBS AG UBS -7.61% CH:UBSN -0.79% gained 3% after the Swiss bank said Tuesday it expected to report a “modest” net profit in the third quarter. The result would include the $2.3 billion loss from unauthorized trading previously disclosed. Shares of Deutsche Bank AG DB -2.83% DE:DBK -3.39% fell 3% in premarket trading after the German bank said it won’t be able to achieve its 2011 pretax target of 10 billion euros ($13.2 billion) from its core businesses as the euro-zone debt crisis has hurt trading volumes and revenue. The bank also said it will book impairment charges on Greek sovereign debt of €250 million and will cut around 500 jobs. In the commodity markets, December gold futures GC1Z +0.65% rose $13 to $1,670.70 an ounce in electronic trading on Globex.

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