daytrades may 17 pre-market

Morning traders.

Market wrap: Rallies in the big Australian miners in overseas trade should partly cushion the local share market this morning from further overnight falls in US and European stocks.

The June SPI futures contract ended the night session 16 points or 0.34% weaker at 4653 as Europe's debt crisis deepened and commodities endured a choppy session. But BHP and Rio Tinto rebounded in US trade as mining stocks out-performed most US sectors.

Tech stocks paced a slide on Wall Street that accelerated into the closing bell. The S&P 500 lost 0.62% as weak regional manufacturing data continued a run of disappointing US economic reports and investors continued to take profits from a rally that pushed the index up nearly 6% this year. The Dow eased 47 points or 0.38% and the tech-heavy Nasdaq slumped 1.63%.

"There's concern about a soft spot," the chief investment officer at LPL Financial in the US told Bloomberg. "We are starting to see a peak in manufacturing and margins. In addition, there's the European debt crisis. They've been trying to deal with the symptoms, without curing the disease. It's not an easy fix. The market has had a big run, with both stocks and commodities up a lot. The bigger the party, the tougher the hangover."

Monthly manufacturing figures from the New York area missed expectations. The Empire manufacturing index eased from 21.7 last month to 11.9, still indicative of expansion. Economists surveyed by Bloomberg expected a figure around 19.6.

European finance ministers met overnight to sign off on a bail-out package for Portugal and discuss Greece's request for further aid. Officials said Greece would have to increase austerity measures to secure more funds and no decision on a new package was imminent.

Oil gave back some of last week's gains on growing signs that flooding in the US will not affect refinery production. Crude futures dropped $2.70 or 2.7% to $96.99 a barrel. Gasoline was hit even harder, with June futures tumbling 16 cents or 5% to their lowest level since mid-March.

"This may be 'hell week' in petroleum markets, with all signs pointing to more downward movement for crude oil as well as gasoline and diesel fuel prices," a petroleum-industry analyst wrote in a note quoted on MarketWatch.

Precious metals extended recent declines despite some softening in the US dollar as the euro rebounded. Gold for June delivery was recently down $4.10 or 0.3% at US $1,489.80 an ounce. Silver for July delivery gave up $1.42 or 4.1% at $33.59 an ounce.

Copper improved for a third straight session in London, but other industrial metals added to recent losses. In London, copper put on 0.2%, while aluminium lost 0.6%, lead 0.55%, nickel 0.3%, tin 2% and zinc 0.7%. US copper was recently down 0.3%.

The major European markets opened sharply lower but pared losses as Wall Street notched initial gains overnight. Britain's FTSE eased 0.04%, Germany's DAX 0.21% and France's CAC 0.72%. Greece's major share index fell 1.9%.

TRADING THEMES TODAY

BEARS IN CONTROL: No change overnight in the general downward trend on most major markets. US stocks dropped to a three-week low and most commodities lost ground. European stocks traded much lower than their closes but were suckered by an initial recovery on Wall Street that later faded. Our two big miners are getting close to major horizontal support levels in Australia, so it was good to see them advance overnight. BHP rallied 2.2% in the UK and 0.5% in the US. Rio rallied 2% (UK) and 1.1% (US). Those gains are the main reason why our futures are not a lot worse this morning.

ECONOMIC NEWS: The minutes from the last Reserve Bank policy meeting are due at 11.30 am. European finance ministers will continue to discuss debt matters tonight on day two of a two-day meeting. British inflation and German investor sentiment figures are scheduled for release. Building permits are the main scheduled item in the US tonight. Also due: housing starts, industrial production and the capacity utilisation rate.

Good luck to all.