daytrading may 23 pre-market

Morning traders.

Market wrap:

Shares are set to give back some of yesterday's gains at today's open after a rally on Wall Street faded in the final hour following reports that Greece is preparing to leave the euro.

The June SPI 200 futures contract ended the night 18 points or 0.4% weaker at 4117 as violent gyrations in the final hour saw US stocks, oil and gold set new lows for the session.

The Dow was up 71 points in the early afternoon after improved housing data but closed two points or around 0.01% in the red. The S&P 500 clung on to a gain of one point or 0.05% and the Nasdaq lost 0.29% as Facebook plunged another 8.55%.

The reversal in sentiment came after former Greek Prime Minister Lucas Papademos was reported as saying European states were preparing contingency plans for Greece to leave the euro-zone and warned that an exit would have "catastrophic" economic effects. Papademos said Greece has to stick with its austerity drive, despite electoral discontent.

"We went from risk-on to risk off pretty quickly," the chief investment officer at Philadelphia Trust told Bloomberg. "Greece is not a major economy, but there's obviously fear of contagion in case it exits the euro. These outside factors will weigh on the market even as economic numbers are good."

Signs of life in the stagnant US housing market earlier helped Wall Street advance for a second day. Sales of existing homes improved for the first month in four, increasing 3.4% last month. Year-on-year sales were up 10% from April 2011.

US investors were also encouraged by a strong session in Europe ahead of tonight's informal summit of the continent's leaders. Germany's DAX jumped 1.65%, France's CAC 1.88% and Britain's FTSE 1.86%.

The US dollar index hit a new four-month high as Papademos's remarks encouraged a fresh "flight to safety". traders dumped the euro and the yen after Fitch Ratings cut Japan's sovereign rating. The Australian dollar fell more than 1% to 98.2 US cents.

Commodities, already under pressure from the rising greenback, sagged with US equities in the last hour of US trade. Oil declined as progress in nuclear negotiations with Iran removed some of the geopolitical risk supporting prices. West Texas crude for June delivery was recently down $1.12 or 1.2% at US$91.45 a barrel.

Gold declined for a second session as this week's improvement in risk appetite discouraged buyers. Gold for June delivery was lately down $21 or 1.3% at US$1,567.50 an ounce.

Copper reversed gains in London during US trade. Tin was pushed higher by Chinese buying, according to Reuters. In London, copper rallied 0.1%, lead 0.6%, tin 2.4% and zinc 0.2%. Aluminium lost 0.9% and nickel 1.4%. US copper for July delivery was recently off four cents or 1.1% at $3.46 a pound.

TRADING THEMES TODAY

JITTERS REMAIN: That this is a nervous market was underlined by the alacrity with which US traders dumped risk assets including equities, commodities and other currencies when Dow Jones reported a few remarks by a former Greek Prime Minister. (Read more here.) Talk about jumping at shadows - there was nothing new in the interview that I could see. Still, it leaves our market in the unhappy position of having yesterday pre-empted an overnight rally that didn't happen. Futures traders don't appear overly gloomy but we should give back a bit at the open. Any strength after that would be a bullish sign that the worst of this latest freefall is behind us.

ECONOMIC NEWS: Two rival leading indexes are due this morning - the Conference Board's version at 10am EST and then the Melbourne Institute's take at 10.30am. European heads of state meet tonight in Brussels to discuss various economic issues, but politicians have been downplaying expectations for major new initiatives. Highlights tonight in the US include new home sales, the house price index and crude oil inventories.

Thanks Guzz and Trees for the kind words yesterday. I'm still not 100% but the fog has lifted a little this morning. Good luck to all.