Stock Futures Point Lower ahead of Trade Report

By  | 

NEW YORKWall Street appeared ready to extend its losses Tuesday as investors already uneasy about weak corporate profit reports awaited a reading on overseas demand for U.S. products.

The Commerce Department will release monthly trade data for November at 8:30 a.m. Eastern time. While U.S. imports are expected to have fallen sharply, reflecting a decline in oil prices, investors will be concerned about export figures. As the recession deepens overseas, demand for American products has fallen off in recent months. The fear is that as companies struggle with waning global demand, it will be more difficult for the economy to rebound.

Underscoring the pain American manufacturers are feeling, aluminum giant Alcoa Inc. reported late Monday that it lost $1.19 billion during the fourth quarter as demand for aluminum plunged. Other companies also are warning that their results are being hit hard by the recession.

Investors remain on edge as more companies prepare to report earnings over the next few weeks. Investors are watching closely for companies' expectations for business conditions in 2009. Computer chip maker Intel Corp. and drug company Genentech Inc. are among the companies reporting results this week.

The market also will get an earlier-than-expected reading on the financial sector this week when JPMorgan Chase & Co. reports earnings on Thursday — nearly a week ahead of its original schedule. Investors are fearful of another year of multibillion dollar losses among financial companies.

Meanwhile, Citigroup Inc. and Morgan Stanley are expected to announce a deal as soon as Wednesday to combine their brokerage operations as Citi struggles to raise additional cash.

Ahead of the market's open, Dow Jones industrial average futures fell 38, or 0.45 percent, to 8,406. Standard & Poor's 500 index futures fell 5.50, or 0.63 percent, to 862.60, while Nasdaq 100 index futures fell 14.75, or 1.22 percent, to 1,191.25.

Stocks fell for a fourth straight session on Monday on fear that corporate profit reports will signal a recovery in the economy is further off than originally anticipated. The Dow shed 125 points, and broader stock indexes fell more than 2 percent. The market's decline Monday followed its worst week since November. However, stocks are still up sharply from their late November lows.

On Tuesday, Federal Reserve Chairman Ben Bernanke is expected to shed light during a speech in London on the Fed's historic decision last month to push its target interest rate to near zero.

Also Tuesday, the House Financial Services Committee will hold a hearing to discuss the priorities for how the remaining $350 billion of the financial bailout fund is spent. President-elect Barack Obama on Monday asked President George W. Bush to request the money so that it can be at the ready when Obama takes office next week. Bush agreed to notify Congress.

Obama said Monday he will fundamentally change the way the remaining funds are allocated. He said some relief would be directed toward housing and small business.

Bond prices were mixed early Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged from late Monday at 2.31 percent. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.08 percent from 0.06 percent late Monday.

The dollar rose against other major currencies, while gold prices fell.

Light, sweet crude fell 77 cents to $36.82 in electronic premarket trading on the New York Mercantile Exchange.

Asian markets retreated sharply, hurt by reports that Sony Corp. is sinking into its first yearly operating loss in 14 years on declining sales for digital cameras, flat-panel TVs and other gadgets. Japan's Nikkei stock average fell 4.79 percent. Hong Kong's Hang Seng index dropped 2.17 percent.

In midday trading, Britain's FTSE 100 was down 1.65 percent, Germany's DAX index was down 1.85 percent, and France's CAC-40 was down 2.21 percent.