U.S. stock futures tumbled this morning, indicating stocks may take a hit at the open today. Troubles within the finance sector as Citigroup (NYSE: C) lost its CEO and announced writedowns of up to $11 billion due subprime mortgage woes.Friday, U.S. stocks actually closed higher after a surprisingly strong October payrolls report and an unexpected rise in factory orders. The Dow industrials rose 27 points, or 0.2%, the Nasdaq Composite adding 15 points, or 0.56% and the S&P 500 ended up 1.2 points, or 0.08%.
Only one data point is due today with the Institute of Supply Management's non-manufacturing index to be released at 10:00 a.m., EST. The index is expected to decline slightly.
Overseas, Asian stocks closed lower, due to the same concerns arising from the Citigroup news with Hong Kong's Hang Seng index falling 5%, China stocks falling 2.5% and Japan's Nikkei -- where Citigroup shares debuted today -- dropping 1.5%.
Similar concerns weighed on European stocks with the London's FTSE 100 dropping 1.25% by midday.
Oil prices fell by more than $1 in Asian trading today to under $95 a barrel as traders pocketed gains from the previous session's record settlement and due to tensions in Turkey easing a little. However, other geopolitical concerns escalated as Pakistan President Gen. Pervez Musharraf decided to suspend the constitution. This gave some support for the U.S. dollar as investors sought safety. The dollar rose against most other major currencies, while gold prices fell.
No doubt Citigroup dominates this morning's headline news. While many shareholders may be happy with the resignation of Chairman and Chief Executive Charles Prince, the nation's largest bank also announced it would take additional losses of $8 billion to $11 billion depending on market conditions. This is after taking a $6.5 billion hit in the third quarter already and many concerns remain as to its off-the-books investment vehicles funded by risky debt.
Many financial companies were hit by downgrades today including Merrill Lynch (NYSE: MER), Bear Stearns (NYSE: BSC) and Barclays (NYSE: BCS).
In other corporate news, Ford (NYSE: F) and the UAW reached an agreement and Chinese energy conglomerate PetroChina (NYSE: PTR) saw its shares triple in value in its trading debut in Shanghai following an initial public offering that raised $8.94 billion to become the world's largest energy company by market capitalization of over $1 trillion.
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Reader Comments (Page 1 of 1)
11-05-2007 @ 9:05AM
julie pierce said...
Walmat Stock has not gone over sixty dollars since 1999.
Has anyone taken a good look at the infamous Lee Scott lately?
The empire is crumbling but he doesn't care.
It's The Walmart Way Not Sam's Way.
11-05-2007 @ 9:40AM
FELIX SOTO said...
LIKE I SAID ANY DAY NOW ILL TELL YOU ABOUT IT ON THE SOUP LINE