* Global markets fall after German market restrictions
* Target Corp, Deere & Co earnings top estimates
* Futures off: Dow 56 pts, S&P 7 pts, Nasdaq 13.5 pts
* For up-to-the-minute market news see []
By Chuck Mikolajczak
NEW YORK, May 19 (Reuters) - U.S. stock index futures fell
sharply on Wednesday, with markets rattled by Germany's
decision to ban naked short selling of certain financial
instruments and comments from its chancellor that the euro was
in danger.
Germany banned naked short sales of euro-denominated
government bonds, credit default swaps based on those bonds and
shares in the country's 10 leading financial institutions in a
move that appeared to surprise its partners in the European
Union, who said they were not consulted. []
German Chancellor Angela Merkel said in a speech to
parliament the euro was in danger and urged speedy action to
stop market "extortion" and said the EU needed a process for
"orderly" insolvency of its members. []
European shares fell sharply as Germany's move sparked
concerns of tighter regulation, and the euro <EUR=> fell to a
four-year low of $1.2145 before bouncing slightly above the
$1.22 level. []
"Since the announcement of the rescue plan there seems to
be a leakage of confidence as to how much it is going to cost,
how it is going to get paid for. We are not hearing enough from
European leaders to say we've got our arms wrapped around
this," said Arthur Hogan, chief market analyst at Jefferies &
Co in Boston.
"Instead the first major announcement that you get from
European leaders is to say we are going to ban short selling of
debt and equity, which sounds like panic, and it sounds like
something that is being done unilaterally without discussing it
with other European nations."
In naked short selling, a trader sells a financial
instrument, betting that its price will fall, without first
borrowing the instrument or ensuring that it can be borrowed,
as in a conventional short sale.
S&P 500 futures <SPc1> fell 7 points and were below fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures <DJc1> dropped
56 points, and Nasdaq 100 futures <NDc1> shed 12.25 points.
* After the closing bell on Tuesday, Hewlett-Packard Co
<HPQ.N> reported results that beat expectations, and the
company raised its full-year earnings outlook. Its stock rose
2.5 percent to $47.97 in premarket trade on Wednesday.
[]
* Deere & Co <DE.N> shares added 2.3 percent to $57.16
after the farm equipment maker posted a stronger-than-expected
quarterly profit and raised its full-year outlook.
[]
* Target Corp <TGT.N> shares were unchanged at $54.22 after
the retailer posted a higher first-quarter profit, and food
producer Hormel Foods Corp <HRL.N> was unchanged at $41.78
after reporting better-than-expected second-quarter earnings.
[] []
* Other companies reporting quarterly earnings on Wednesday
include Limited Brands Inc <LTD.N>, Autodesk <ADSK.O>, Applied
Materials Inc <AMAT.O>.
* Data due later Wednesday includes the U.S. consumer price
index for April and the release of the Federal Reserve's
policy-making committee minutes from its most recent meeting. A
poll of economists by Reuters forecasts a month-over-month rise
in April inflation, excluding food and energy costs, of 0.1
percent.
(Editing by Padraic Cassidy)
