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By Ellis Mnyandu
NEW YORK, Nov 19 (Reuters) - U.S. stocks headed for a sharply lower open on Wednesday as diminishing prospects for a U.S. auto industry government rescue added to worries about the slumping global economy.
The upheaval rocking the U.S. auto industry was underscored by an announcement from Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) that the Japanese automaker will stop all of its North American factories for two days next month. For details, see [ID:nT338414]
"Almost all the news is negative as you'd expect because the economy is slowing so much," said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
S&P 500 futures SPc1 fell 18 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 slipped 174 points, and Nasdaq 100 NDc1 futures were down 26 points.
With stocks struggling to shake off the gloom that has sent benchmark indexes to their lowest levels since 2003, investors' growing anxiety sent two-year U.S. Treasury yields to a five-year low in search of safe-haven government debt.
Before the bell, shares of General Motors (GM.N: Quote, Profile, Research, Stock Buzz) declined 5.5 percent to $2.92, while Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) fell 3 percent to $1.63.
U.S. auto executives from GM, Ford and Chrysler warned Congress on Tuesday that their industry was teetering on the brink of disaster as they pleaded for a $25 billion aid package despite political opposition to another multibillion-dollar government bailout. [ID:nN18548335]. More hearings before a House committee are planned for Wednesday.
But even with nervousness about fallout from the economic slump, BJ's Wholesale Club Inc (BJ.N: Quote, Profile, Research, Stock Buzz) offered positive news as the warehouse club operator raised its full-year profit outlook. [ID:nWNAB5310]
BJ's shares were little changed from their Tuesday close of $33.57. On the technology front, Goldman Sachs removed networking equipment maker Cisco Systems (CSCO.O: Quote, Profile, Research, Stock Buzz) , a tech bellwether, from its "conviction buy list," according to theflyonthewall.com. Cisco shares were off almost 2 percent at at $16.16 before the bell.
In economic news, U.S. consumer prices plummeted at the sharpest rate on record in October as a slowing economy caused energy costs to drop, according to a government report. Additionally, construction starts on new U.S. homes fell to a record low in October.
The Federal Reserve is due to release minutes of its recent policy-setting meeting later on Wednesday. (Reporting by Ellis Mnyandu; Editing by Kenneth Barry)
