Pre-open moves
U.S. stock futures pointed to additional gains on Tuesday after the biggest one-day point gain ever for the Dow Jones Industrial Average. The U.S. government announced plans to inject $250 billion into the country's largest banks.
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Global markets
Markets rose sharply for a second day in Europe and Asia on expectations concerted governmental bailouts and loan supports will ease the global credit crunch. Japan's Nikkei index rose a record 14.2%.
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Broker action
Gold prices could hit $1,500 as global plans to rescue the financial industry are set to increase inflation pressures, according to analysts led by Francisco Blanch at Merrill Lynch. "The unintended consequence of the ongoing financial bailout will be a return of inflationary pressures to the commodity markets," wrote the analysts in a note released Monday. The analysts didn't say when gold would hit the price target. They also predicted oil prices will rise to $150 a barrel.
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President Bush announced Tuesday the government's latest measures aimed at bringing stability to the financial system and encouraging the nation's banks to begin lending again. The heart of the plan is the determination that the government should spend $250 billion to buy ownership stakes in major U.S. banks in an effort to recapitalize the financial sector.
Johnson & Johnson said Tuesday its third-quarter profit totaled $3.31 billion, or $1.17 a share, from $2.55 billion, or 88 cents a share, in the same quarter a year before. Analysts had expected earnings on average of $1.11 a share, according to a FactSet Research survey. Revenue for the quarter was $15.92 billion compared to $14.97 billion in the year-ago period. Domestic sales increased 11.2%, while international sales increased 14.7%. The company also raised its 2008 profit forecast to $4.50 to $4.53 a share
PepsiCo said Tuesday that third-quarter earnings were $1.58 billion, or 99 cents a share, compared to $1.74 billion, or $1.06 a share, in the same period a year ago. Revenue rose to $11.2 billion compared to $10.2 billion. Analysts polled by FactSet Research estimated, on average, earnings per share of $1.08 on sales of $11.2 billion. PepsiCo said it plans to eliminate about 3,300 jobs worldwide and sees a pre-tax fourth-quarter charge of about $550 million to $600 million for the restructuring. For the full year of 2008, PepsiCo expects to earn $3.41 to $3.44 a share. PepsiCo shares rose about 7% Monday to $61.77.
Ingersoll-Rand Co. said Tuesday it was cutting its third-quarter earnings estimate from continuing operations due to a sharper-than-expected downturn in the global economy. For the recent quarter, the Hamilton, Bermuda company lowered its estimate to a range of 98 cents to $1.00 a share from a prior range of $1.05 o $1.10 a share.
Treasurys dropped Tuesday, sending yields up the most in almost a month, as the Treasury Department moved to inject about $250 billion directly into U.S. financial institutions in the latest effort to ease the credit crunch. Two-year note yields rose 28 basis points to 1.89%.
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