MW: U.S. stock futures lower ahead of bank rescue plan
U.S. stock futures traded lower Tuesday as investors await the details of President Obama's plan to rescue banks and a vote on a stimulus package, both viewed by the president as key in getting the economy on track.
S&P 500 futures fell 10.2 points to 854.90 and Nasdaq 100 futures dropped 11.75 points to 1,264.00. Dow industrial futures dropped 88 points.
Tuesday is D-day for the Obama's administration's plan to help troubled banks, with Treasury Secretary Timothy Geithner due to deliver the speech at 11 a.m. Eastern.
"Today could be a momentous day in this current crisis with Treasury Secretary Geithner scheduled to announce the outline of President Obama's financial stability plan," noted strategists from Deutsche Bank.
"One could argue that we are potentially at the most fragile period for global markets since the Great Depression."
The Senate is due to vote on the $838 billion stimulus package. Wholesale inventories data is due at 10 a.m., and Federal Reserve Chairman Ben Bernanke will be speaking at 1 p.m. in front of the House Financial Services Committee on efforts to restore liquidity.
Jitters were also stoked by a report from a Japanese newspaper that Russia was going to press to reschedule $400 billion of foreign loans. A Russian banking group denied that report.
"Markets will continue to monitor developments closely on Tuesday and comments from Fed Chairman Bernanke will also be important. In particular, comments on potential Fed buying of long-term securities will have a significant impact on Treasury-market and U.S. dollar sentiment," noted analysts from Sucden Financial.
The dollar was stronger against European rivals, though it traded lower against the Japanese yen. Oil futures rose back over the $40-a-barrel mark.
Earnings are due from brewer Molson Coors futures exchange IntercontinentalExchange and Qwest Communications among others.
UBS said it's cutting another 2,200 investment bank jobs following a $7 billion fourth-quarter loss.
Boeing late Monday restated its 2008 and fourth quarter profit to reflect a wider loss for the quarter and a narrower profit for the full year. Boeing shares slipped 2% in Frankfurt.
Asian share markets ended mixed Tuesday, with indexes moving in a narrow range as investors awaited a Senate vote on the U.S. stimulus package. The Shanghai Composite rose 1.8% while the Nikkei 225 slipped 0.3% in Tokyo.
In Europe, stocks moved lower, with the FTSE 100 down 1% in London and the German DAX 30 falling 1.7% in Frankfurt. Metals plays like ArcelorMittal the world's top steelmaker, paced the decline.
U.S. stocks were range bound Monday with eyes trained on developments in Washington. The Dow industrials fell 9 points, the Nasdaq Composite was barely moved and the S&P 500 rose a point.
