MW: Futures point to an ugly start for U.S. markets
U.S. stock futures were headed sharply lower on Friday with markets apprehensive after losses in the previous session driven by job cuts from tech bellwether Microsoft, while heavy losses for Asia and Europe compounded the gloom.
"Yesterday's session was super-volatile and the sharp rally off the lows had the air of a dead-cat bounce. The disappointment surrounding Microsoft's job cuts and a plethora of recent bad economic data is still hanging over the market," said Martin Slaney, head of derivatives at GFT in London in a note to investors.
Markets were also awaiting data from General Electric and a few others, while a potential blockbuster deal in pharmaceuticals between Pfizer Inc. and Wyeth was also commanding attention.
Dow industrial futures fell 191 points to 7,901 and S&P Futures fell 20.3 points to 805.2, while those on the tech-heavy Nasdaq 100 were down 25.5 points to 1,146.7.
On Thursday, Microsoft Corp. said it would cut 5,000 jobs, which, paired with some dismal economic data, was taken badly by U.S. markets.
Europe markets were getting slammed on Friday, with sharp losses from banks and insurance companies helping to pull the Dow Jones Stoxx 600 back to levels not seen since 2003. That index was down 2%.
More bad news from the tech sector was seen from Qimonda AG, the distressed German memory-chip maker majority-owned by Infineon Technologies AG . The company said Friday it filed for bankruptcy.
In the U.K., the FTSE 100 index was down 1.6%, with economic data adding to market gloom. Government data showed fourth-quarter 2008 growth fell 1.5%, the deepest contraction since 1980 and confirmation the U.K. has entered its first recession since 1991.
In Asia, technology stocks led the decline after Japan's Sony Corp.forecast its first annual loss in 14 years, while Korea-based computer memory chip maker, Samsung Electronics reported its first-ever quarterly loss Friday. The Nikkei closed down 3.8%.
In company news for the U.S. on Friday, the Wall Street Journal reported that Pfizer is negotiating to buy rival drug maker Wyeth in a blockbuster deal potentially worth more than $60 billion that could alter the global drug industry.
Dow Chemical Co. is on the verge of getting approval from U.S. antitrust authorities to acquire Rohm & Haas Co. , according to a report on Bloomberg. Lawyers at the Federal Trade Commission recommended the deal be allowed to proceed after Dow agreed to sell its acrylic and emulsion businesses the report said, citing people familiar with the matter.
On the earnings front Friday, General Electric is expected to report fourth-quarter earnings of 37 cents a share, according to a consensus survey by FactSet Research. Xerox Corp. ) is forecast to report earnings of 34 cents a share in the fourth quarter and Harley-Davidson is set to report fourth-quarter earnings of 57 cents a share.
Outside of stocks, light crude-oil futures were trading slightly lower, down 87 cents at $42.80, while gold futures were up a full percent.
Within currencies, the dollar is mostly higher, rising sharply versus the euro and the British pound, but losing ground against the Japanese yen. The euro slipped to $1.282, while the dollar fell to 88.19 yen.
