Stocks try to recover from sharp drop

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Futures are trying to bounce this morning as political worries hammer stocks across the Atlantic.

Sentiment has been improving in the last hour, and the S&P 500 is indicated to open higher by about one-third of a percentage point after a drop of almost 2 percent yesterday. Indexes are lower by 1 percent to 2 percent in Europe and fell by a similar magnitude in Asia overnight.

Sentiment darkened yesterday after Italian elections produced no clear winner, casting doubts about the debt-laden country's ability to make key reforms. The news comes as stocks consolidate following an early-2013 rally that brought the S&P 500 back to its highest levels in more than five years.

Investors now face potential political risk in the United States as well, as the federal government nears forced spending cuts under sequestration. On the economic front, today will bring the Case-Shiller home price index at 9 a.m. ET, along with monthly new-home sales and consumer confidence one hour later.

Currencies are painting a modestly bullish picture. The euro is inching higher and attempting to rebound, while the Japanese yen is down after yesterday's sharp rally. Commodities are more bearish, with oil, copper, gasoline, and silver all lower. Gold is up almost half a percent, and agricultural foodstuffs are mixed.

In company-specific news, casino operator Caesars Entertainment is down by about 10 percent after earnings and revenue missed expectations. Home Depot is up about 1.5 percent after its results beat consensus. Titan International, a provider of tires for agricultural machinery, is indicated to open 12 percent lower after reporting weak quarterly results.

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