Opening not looking good
Momentum should take DOW to tgt. Fed will likely issue another "informal" statement, possibly using home sales numbers as basis.
I don't see a Fed cut bumping the mkts up again. Rather, it should cause serious concern. But after the shellacking I took last time, I may be forced to hedge much more defensively.
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Wall Street Headed to Lower Open
Wednesday October 24, 8:09 am ET
By Madlen Read, AP Business Writer
Stocks Head Toward Lower Open After Merrill Lynch Earnings
NEW YORK (AP) -- U.S. stocks pointed toward a lower open Wednesday as Wall Street showed caution after results from Merrill Lynch & Co. revealed big credit-related losses.
The investment bank said it wrote down $7.9 billion in fixed-income instruments called collateralized debt obligations and from defaulting subprime mortgages -- more than the $5 billion writedown it estimated earlier this month. The result was a net loss for the quarter of $2.3 billion, after total revenue plummeted 94 percent. Merrill shares dipped 1.8 percent in pre-market trading.
The worse-than-anticipated loss signaled to investors that the financial sector may be in a more dire situation than feared. Wall Street knows most banks and brokerages have had problems this year with the tight credit markets -- as evidenced by U.S. banks' plan to create a fund to buy distressed securities to avoid a fire sale environment -- but it's unclear how deep-seated and long-lasting those troubles are.
Meanwhile, the technology sector appeared to be losing momentum from earlier in the week. Amazon.Inc. said late Tuesday its quarterly profit more than quadrupled, but it only beat per-share estimates by a penny. Investors didn't see enough reason to bring the Internet retailer's shares, already at their highest level since 1999, even higher. Amazon shares plunged 9.3 percent in pre-market trading.
Dow futures fell 45, or 0.33 percent, to 13,662. Standard & Poor's 500 index futures fell 7.50, or 0.49 percent, to 1,517.90. Nasdaq 100 index futures fell 19.00, or 0.86 percent, to 2,193.00.
On Tuesday, stocks finished with a strong gain as the market, though still uncertain about the economy and the credit markets, found solace in better-than-expected earnings from companies including Apple Inc. and American Express Co.
In other earnings news Wednesday, Boeing Co. reported a sharp rise in third-quarter profit, but the aerospace company reduced its 2008 revenue forecast. Boeing, one of the 30 companies that make up the Dow, fell 1 percent in pre-market trading.
Corning Inc. also disappointed investors by posting fourth-quarter profit and revenue outlooks that fell below analyst estimates. Despite reporting a third-quarter profit rise, Corning tumbled 7 percent in pre-market trading.
GlaxoSmithKline PLC said third-quarter profit fell nearly 6 percent on strong competition from generics and declining U.S. sales of its blockbuster diabetes drug. The drugmaker's shares fell 2.5 percent in pre-market trading.
Crude oil futures for December delivery fell 21 cents to $85.06 a barrel in pre-opening trading on the New York Mercantile Exchange.
The dollar rose against most other major currencies, except the yen. Gold slipped.
Stock markets overseas were mixed.
In Asian trading, Japan's Nikkei stock average fell 0.56 percent, while Hong Kong's Hang Seng index fell 0.15 percent. In European trading, Britain's FTSE 100 rose 0.01 percent, Germany's DAX index slid 0.23 percent, and France's CAC-40 rose 0.06 percent. |
