Stock futures were higher this morning, indicating U.S. stocks could start this first week's session with gains, trying to stage a comeback of sorts from Friday's selloff. Now that the recession option has all but been digested and accepted, especially after the economists conference over the weekend, bargain hunters feel able to look for deals keeping that in mind. A higher chance for a Federal Reserve easing move could also be affecting markets now as well as lower oil prices.On Friday, stocks dropped sharply after non-farm paryroll report showed very few job additions and a jump in the unemployment rate. The Dow industrials dropped 256 points, or 1.96%, the Nasdaq Composite lost 98 points, or 3.77%, and the S&P 500 fell 35 points, or 2.46%.
While there are no economic data due out today, more housing data is due out Tuesday.
Also on Tuesday, Alcoa Inc. (NYSE: AA) will be the first of the 30 Dow Jones industrials to report fourth-quarter results, kicking off fourth quarter earnings season.
Analysts at the American Economic Association gathered for a two-day annual meeting, saying a recession is nearly a given at this stage and likely to be a serious one.
Meanwhile, as the Fed struggles to figure out the appropriate monetary policy giving the slowing growth and rising inflation, help may come in the form of fiscal policy changes. According to CNN, "President Bush may propose new measures to boost the economy by the time he gives his State of the Union address later this month." Both Bush and Treasury Secretary Paulson are scheduled to speak later today.
Overseas, Asian markets finished lower. European markets are higher by midday trading.
In corporate news:
The consumer-electronics sector will be in focus today as the annual Consumer Electronics Show continues in Las Vegas.
There were a few downgrades this morning:
- International Business Machines (NYSE: IBM) and Network Appliance (NASDAQ: NTAP) were both downgraded to Neutral from Buy at UBS. UBS prefers Apple (NASDAQ: AAPL) and Hewlett Packard (NYSE: HPQ).
- Best Buy (NYSE: BBY) was downgraded to Underperform from Outperform at Bear Stearns, due to the slowdown in the product cycle.
- Motorola Inc. (NYSE: MOT) was downgraded at RBC Capital Mkts from Outperform to Sector Perform. Motorola also announced Friday more layoffs and a charge in the fourth quarter.
Why do we have a weak dollar?
Holiday hiring slow for retailers
Closing Bell: What sell-off? (AIG, ABK, EPR, MBI, JAVA, ORCL, ERTS)
