BLBG: U.S. Stock Futures Fall After Obama Says Economy Faces Crisis
.S. stock-index futures declined after President Barack Obama said the world’s largest economy faces a “full-blown crisis.”
Bank of America Corp. and Citigroup Inc., the biggest U.S. banks, retreated more than 1 percent in pre-market trading in New York. Boeing Co., the world’s second-largest commercial planemaker, retreated 3.7 percent in Europe.
Standard & Poor’s 500 Index futures expiring in March lost 1.3 percent to 854 as of 10:04 a.m. in London. Dow Jones Industrial Average futures retreated 1 percent to 8,138 and Nasdaq-100 Index futures decreased 1 percent to 1,262.5.
Most U.S. stocks fell yesterday as concern Obama’s economic stimulus package won’t be enough to pull the nation out of a recession offset a rally in financial and industrial shares.
The Senate is set to vote today on the $838 billion stimulus plan after Democrats narrowly won a key procedural vote to cut off debate on the measure.
“The market is waiting with bated breath for the final decision,” Chicuong Dang, an analyst at KBL Richelieu Gestion, which oversees $5.2 billion in Paris, said in a Bloomberg Television interview. “We’re in a difficult economy for companies. We don’t know the amplitude of the crisis.”
Obama pressed his case for quick action by lawmakers during a trip yesterday to Elkhart, Indiana, where unemployment reached 15.3 percent in December, and during a nationally televised press conference last night.
‘Full-Blown Crisis’
The U.S. economy faces a “full-blown crisis,” he said at the press conference. “We can’t depend on government alone to create jobs or economic growth,” he said. “But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life.”
The S&P 500, Dow and MSCI World Index posted their steepest January declines as companies reported disappointing earnings and the U.S. economy shrank at the fastest pace in 26 years.
Bank of America lost 3.3 percent to $6.66 and Citigroup dropped 1.3 percent to $3.90. Boeing fell 3.7 percent to $41.22 in Germany.
Genentech Inc. fell 1.5 percent to $81.46 after repeating that shareholders should reject Roche Holding AG’s hostile $86.50-a-share takeover bid. The Swiss drugmaker said yesterday that Genentech had sought $112 a share.
