U.S. stock futures were heading south on Wall Street Thursday, with stocks overseas lower on the view a sustained turnaround for stocks can't be called yet, while Genentech agreed to a buyout worth $48.6 billion from Roche.
S&P 500 futures fell 5.1 points to 715.40 and Nasdaq 100 futures fell 6.5 points to 1,125. Dow industrial futures fell 45 points to 6,869.
U.S. stocks eked out their first back-to-back gains since early February Wednesday after JPMorgan Chase Chief Executive Jamie Dimon became the latest to express confidence in his institution's profitability and downplay nationalization fears. The Dow Jones Industrial Average closed up 3.8 points, the S&P 500 rose 1.76 points and the Nasdaq tacked on 13.36 points.
Those skeptical about the strong rally Tuesday, which marked the best gains for the Dow and S&P since November, were seeing signs of weakness in the skittish market.
"The U.S. and to a lesser degree Europe did exceptionally well to hang on to Tuesday's monster gains yesterday, which to all intents and purposes was just an overdue bear squeeze rally from a market that was also dramatically oversold on a technical basis," said David Buick, market analyst with BGC Partners, who noted that volumes were pretty low on Wednesday.
He said the general perception is that things are getting a little better for the major global banks like Citigroup, JPMorgan, Deutsche Bank and Goldman Sachs. "But it would be folly to believe that banks are ready to leave the sick bay with the US Treasury Secretary not yet in a position to set out his stall for an agreed rescue plan for the banks in terms of quantitative easing and a perhaps a 'Bad Bank.' Also the economic data remain dire around the world with dole queues lengthening by the day," Buick said.
Nonetheless, it appears the Sage of Omaha is seeing some opportunity in U.S. markets. Billionaire U.S. investor Warren Buffett said he believes buying opportunities are appearing in the U.S., according to a Bloomberg report citing a television interview that will be broadcast Thursday and Friday. He said the odds favor a domestic deal for Berkshire Hathaway Inc. according to the report.
The sharp decline in equity markets, a drop in the amount of money available to fund deals and the declining number of potential bidders, all mean Berkshire Hathaway no longer needs to look overseas for acquisitions, Buffett reportedly said.
Also in focus for U.S. markets, Basel health-care giant Roche agreed to buy Genentech for $95 a share, or a total value of $46.8 billion. Shares of Genentech were up nearly 2% in preopen trade.
Mortgage giant Freddie Mac may be in focus after saying late Wednesday that it's getting billions of dollars in extra government support after reporting a huge quarterly loss.
Data on tap for Thursday include February retail sales and jobless claims.
Dutch insurer Aegon said it will continue to focus on cutting costs and freeing up capital in 2009 as it confirmed it lost 1.18 billion euros ($1.51 billion) in the fourth quarter of 2008. Shares of Aegon were up 1.7%.
Europe markets were lower, led by oil producers and mineral extractors, while Asia markets also stumbled as global economic concerns lingered.
The dollar was a shade weaker against the euro, while crude futures were up 70 cents and gold futures were up $1.90.
