MORNING COFFEE

EU Contagion Fears Spread. World markets are lower on fears that the EU debt contagion could spread.  Both Greece and Ireland have accepted EU and IMF bailouts and the fear is that Portugal and Spain will be next.  Currently the EU Commission’s official position is that both can get by without having to accept a bailout, but traders are unsure. The EU Commission has suggested that the EU double the size of its €440 billion ($588 billion) bailout fund for eurozone governments, an idea which Germany dismissed. Additionally, there are reports that Portugal’s government is under pressure to accept a bailout, which the government has denied. 

KKR Buys Del Monte Foods.  KKR & Co. (KKR) has agreed to purchase Del Monte Foods (DLM) for $4 billion or $19/share and includes the assumption of $1.3 billion in debt. Del Monte can also solicit alternative proposals through Jan. 8.

The stock market will have an early close today. 1:00 p.m.

·         Futures at 7:00: Dow -0.8%. S&P -0.9%. Nasdaq -0.9%. Crude -1.2% to $82.89. Gold -0.9% to $1360.10.

·         Asia: Japan -0.4% to 10040. Hong Kong -0.8% to 22877. China -0.9% to 2872. India -0.9% to 19137.

·         Europe: London -1.7%. Paris -1.7%. Frankfurt -1.4%.