Wall Street to open lower on European banking worries

NEW YORK (Reuters) - Wall Street was poised for a lower open on Tuesday after reports on the European banking system sparked fresh concerns about the financial stability of the region.

The Wall Street Journal reported the European bank stress tests to measure the strength of major banks understated holdings in potentially risky government debt.

Separately, Germany's banking association said the country's 10 biggest banks may need 105 billion euros ($141 billion) in new capital as it revamps regulations designed to prevent future crises.

"This stuff hasn't really gone anywhere. We've chosen not to look at it, and we've chosen to focus on other things, meaning reading into the macro numbers that there may be some greater chance that we are going to avoid a double-dip," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

"But the bottom line is the drivers of real fear in the market have not gone anywhere. They are still there, and they are going to continue to come back every time the market pops its head up until they are resolved."

Barclays Plc's U.S.-traded shares dropped 5.4 percent to $19.18 in premarket trading, while Deutsche Bank AG's ADRs were down 2.7 percent to $62.85 and UBS AG ADRs dipped 2.5 percent to $17.60.

U.S. banks were also lower, with Bank of America Corp shedding 1.4 percent to $13.31, and JP Morgan Chase & Co losing 1.2 percent to $38.70.

In a reshuffling at British banks, Barclays Plc said its investment banking boss, Bob Diamond, will take over as chief executive, and HSBC Plc was expected to announce its chairman was going into government.

U.S.-listed shares of HSBC were down 0.02 percent to $50.67.

S&P 500 futures lost 6.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures shed 51 points, and Nasdaq 100 futures fell 9 points.

Wall Street posted its best week in the last two months, bolstered by stronger-than-expected economic data that had reduced fears of a double-dip recession.

Oracle Corp , the world's third-largest software maker, said Monday it hired Mark Hurd, the former chief executive of Hewlett-Packard Co , as president. Hurd resigned in August after a probe into sexual harassment allegations. Oracle shares climbed 7.6 percent to $24.66.

Air Products and Chemicals Inc raised its bid for Airgas Inc to $5.5 billion, the latest salvo in a hostile bid for its rival.

ResCare Inc advanced 6.5 percent to $13.26 after a deal to be acquired by Canadian private equity firm Onex Corp for $390 million in cash. Onex raised its initial bid for the U.S. home care provider by 65 cents a share.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

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