Before the bell: Futures higher as GM is reporting results

Posted Feb 12th 2008 7:42AM by Melly Alazraki
Filed under: Before the Bell, International Markets, Earnings Reports, Microsoft (MSFT), Yahoo! (YHOO), Market Matters, Citigroup Inc. (C), JPMorgan Chase (JPM), Bank of America (BAC), Countrywide Financial (CFC), Research in Motion (RIMM), Amer Intl Group (AIG), Washington Mutual (WM), Economic Data, Wells Fargo (WFC), Housing

U.S. stock futures were somewhat higher this morning, but the ongoing credit crisis remained a top worry. Several earnings reports are due today, including GM. Meanwhile, the Microsoft-Yahoo saga continued with an answer from Microsoft to Yahoo!'s rejection of its unsolicited bid.

On Monday, U.S. stocks finished higher despite American International Group (NYSE: AIG) with a disclosure that it couldn't properly value certain derivatives it holds. AIG shares dropped over 11.7%, but the tech sector managed to pull up the market. The Dow Jones Industrial Average ended up 57 points, or 0.48%, the S&P 500 added 7.8 points, or 0.59%, and the Nasdaq Composite rose 15 points, or 0.66%.

Without economic data due out today, investors might pay attention to some of the Feds actions aimed at helping out the distressed mortgage sector. Under the plan, called Project Lifeline, at-risk borrowers with all types of mortgages, not just high-cost subprime loans, could be eligible for help under a new plan, involving six big home lenders -- CFC, BAC, JPM, C, WFC, WM. Seriously overdue homeowners may be eligible to suspend foreclosures for 30 days while lenders try to work out more affordable loan terms.

Overseas, Asian stocks finished mixed but mostly higher. European shares edged higher in the morning, even after Credit Suisse Group (NYSE: CS) said fourth-quarter profit fell 72% to 1.33 billion francs, or 1.21 francs a share, missing analysts estimates. The reason were lower earnings at the securities unit after writedowns of 1.3 billion Swiss francs ($1.2 billion) on debt and leveraged loans.

Schering-Plough (NYSE: SGP) said it lost $3.36 billion, or $2.08 per share, in the fourth quarter of 2007 because of accounting rules related to the purchase of Organon BioSciences. Without the accounting adjustments Schering-Plough says it would have had a profit of 27 cents per share in the quarter, beating estimates of 24 cents per share.

The BlackBerry service has been "acting out" Monday, as hubby put it. While Research in Motion (NASDAQ: RIMM)'s BlackBerry outages are rare, when they happen, crackberry addicts get annoyed fast. If anything, perhaps it proves how essential the BlackBerrys have become to so many business users. RIMM shares are being punished, down 1.2% in premarket trading.

Meanwhile, Microsoft (NASDAQ: MSFT) has responded to Yahoo! (NASDAQ: YHOO) decision to reject its $44.6 billion unsolicited offer for the portal, saying the decision was "unfortunate." Moreover, from the statement, it doesn't seem as if Microsoft intends to back down, neither from the offer or from the terms, which some say could perhaps mean a hostile takeover bid.

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