RTRS: US STOCKS-Futures slide as recession fears mount
By Leah Schnurr
NEW YORK, Oct 22 (Reuters) - U.S. stock index futures tumbled on Wednesday as mounting concern that the global economy is hurtling toward recession diminished investors' appetite for risk, sending world markets plunging.
Uncertainty about the profit outlook weighed on sentiment despite more signs that the costs for banks to borrow from each other continued to fall.
Markets in Europe and Asia slid sharply as they were also hurt by worries of a recession, as well as falling commodity prices.
Japan's Nikkei fell nearly 7 percent overnight, while in Europe, benchmark indexes were down more than 4 percent. The price of oil fell below $70 a barrel on concerns that a sour global economic outlook could limit the impact of any supply cuts that could come out of OPEC's Friday meeting.
AT&T Inc (T.N: Quote, Profile, Research, Stock Buzz) and Boeing (BA.N: Quote, Profile, Research, Stock Buzz) both reported quarterly results that missed expectations before the opening bell.
"We started the week off in good spirits about the credit market loosening up, and then the onslaught of earnings hit us yesterday and today," said Arthur Hogan, chief market analyst, Jefferies & Co.
"I get the feeling this is going to be a pretty sloppy earnings season even if we had ratcheted expectations down. The real problem is everyone is expecting to get some guidance and guidance is either lackluster or terrible."
S&P 500 futures SPc1 fell 28.60 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 DJc1 slid 217 points, and Nasdaq 100 NDc1 futures was down 19.25 points.
Apple reported a stronger-than-expected rise in quarterly profit after the closing bell on Tuesday but issued forecasts for the fourth quarter that were below Wall Street's expectations. For details, see [ID:nN21324838].
Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) posted a $23.9 billion quarter loss, a record for any U.S. lender in the global credit crisis. [ID:nN22353892].
Shares of Sandisk (SNDK.O: Quote, Profile, Research, Stock Buzz) skidded more than 25 percent to $11.01 before the bell after Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz) withdrew its $5.9 billion unsolicited bid for the company. [ID:nSEO356306].
Stocks closed down on Tuesday, taken lower by commodity shares that fell on fears of a global recession, while a slew of disappointing earnings heightened worries about the deteriorating profit picture. (Additional reporting by Ellis Mnyandu; Editing by Kenneth Barry)
