Futures stalled as Europe struggles

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Stocks are treading water after selling off yesterday, and Europe continues to struggle this morning.

The S&P 500 is little-changed, while most indexes across the Atlantic fell by half a percent or more. Asian markets were mostly negative in the overnight session after yesterday's 1.4 percent drop in the SPX.

Europe's economy shrank 0.1 percent in the third quarter, marking the potential start of a recession, after debt problems in Greece and Spain undermined confidence. Investors are now worried that the trend may spread to the United States and dumped equities yesterday after  President Obama insisted on raising taxes for high-earning Americans.

In addition to concerns about public finances, violence between Israel and militants in Gaza could affect market sentiment.

Wal-Mart, the largest U.S. retailer and private-sector employer, is also sounding a cautionary tone this morning. The company's quarterly profit beat expectations by a narrow margin, but revenue missed expectations, same-store sales were weak, and guidance was below consensus. WMT is down almost 4 percent in early trading.

Foreign-exchange trading is modestly bullish, with the euro inching higher despite negative growth on the continent. The Japanese yen is also lower across the board, which tends to support asset prices. Commodities are mixed, with oil higher and precious metals lower, while copper is flat.

The big economic report today will be initial jobless claims at 8:30 a.m. ET. Economists expect the reading to climb to 375,000 from 355,000 last week.

Elsewhere in company-specific news, PetSmart and NetApp are indicated to open higher following strong earnings, while Diamond Foods is down sharply after a restatement of earlier results erased more than $50 million of profits.

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