Stock Futures Fall ahead of Auto Bailout Talks

NEW YORK – An anxious Wall Street proceeded cautiously Monday after last week's selloff, sending stock futures lower ahead of economic data and talks in Congress about the automotive industry.

The government at 9:15 a.m. Eastern time will release its October reading on industrial production. The median estimate by economists surveyed by Thomson/IFR is an increase of 0.2 percent after September's drop of 2.8 percent.

Investors were also nervously waiting to see whether the nation's troubled automakers would get a bailout. Senate Democrats, who plan to introduce legislation Monday, want to use part of the $700 billion Wall Street bailout to help prop up Detroit's Big Three carmakers: General Motors Corp., Ford Motor Co. and Chrysler LLC. A vote was expected as early as Wednesday.

General Motors said Monday it will sell its entire stake in Suzuki Motor Corp. for 22.37 billion yen, or $230 million, to raise cash.

In the meantime, the market — concerned that the economy's downturn might last several quarters — was assessing corporate earnings. Retailer Lowe's Cos. said its third-quarter profit fell 24 percent, better than expected, but it predicted a fourth-quarter profit for 8 cents to 16 cents per share — below the average analyst forecast.

Target Corp. is also releasing quarterly results Monday. After last week's Commerce Department report showing a 2.8 percent decline in retail sales for October, investors are not optimistic about the health of the average consumer.

Last Friday, Wall Street ended a turbulent week with a loss, hurtling the Dow down nearly 340 points. For the week, the Dow finished down 5 percent; the S&P 500 index sank 6.2 percent; and the Nasdaq plunged 7.9 percent.

Ahead of the market's open, Dow Jones industrial futures fell 96, or 1.15 percent, to 8,275. Standard & Poor's 500 index futures fell 6.90, or 0.80 percent, to 854.60, while Nasdaq 100 index futures fell 6.25, or 0.54 percent, to 1,149.25.

Leaders from members of the Group of 20 nations met in Washington Friday and Saturday. They made no concrete actions to resolve the global financial crisis, but they did pledge to keep working together to provide loans to financial institutions. The leaders also agreed to reform the International Monetary Fund and the World Bank to give developing nations a stronger say, and to refrain from erecting trade barriers for the next 12 months.

In corporate news, Citigroup Inc. CEO Vikram Pandit is holding a meeting with employees at 8 a.m. Eastern time. Speaking briefly to the AP after a speech in Dubai on Monday, Chairman Winfried Bischoff said the company will make an announcement about its plans at 9 a.m.; he did not deny that job cuts are coming.

The dollar fell against most other major currencies, and gold prices also declined.

Light, sweet crude fell $1.11 to $55.93 a barrel in premarket electronic trading on the New York Mercantile Exchange.

In Asian trading, Japan's Nikkei index rose 0.71 percent, despite a report showing the second-straight quarterly decline in gross domestic product — signalling a recession. Hong Kong's Hang Seng Index fell 0.10 percent.

In midday trading in Europe, Britain's FTSE 100 fell 1.93 percent, Germany's DAX index fell 2.31 percent, and France's CAC-40 fell 2.09 percent.


Comments are posted from viewers like you and do not always reflect the views of this station.
powered by Disqus
631 SW Commerce Pl. Topeka, Kansas 66615 phone: 785-272-6397 fax: 785-272-1363 email: feedback@wibw.com
Gray Television, Inc. - Copyright © 2002-2014 - Designed by Gray Digital Media - Powered by Clickability 34575569