Stock futures were significantly lower this morning, indicating Wall Street may continue Thursday's selloff into Friday after investors received news of a huge loss at AIG, which renewed concerns about the credit crunch, and ahead of several economic reports. Oil prices and the weak dollar are also in focus.On Thursday, stocks dropped, erasing February gains, after economic data indicated the slowest growth the economy has experienced the past few years. Federal Reserve Chairman Ben Bernanke, who testified in front of congress Wednesday-Thursday and talked about the potential of inflation, added to concerns. The Dow industrials fell 112 points, or 0.88%, the S&P 500 fell 12 points, or 0.89%m and the Nasdaq Composite lost 22 points, or 0.94%.
Economic data due out today includes:
- At 8:30 a.m. EST, January personal income and spending will be released. Both are expected to rise 0.2% according to Briefing.com.
- At the same time, a key inflation measure, the core PCE inflation, is expected to show a rise of 0.3%.
- Just after the market opens, February Chicago PMI will be reported. The index that measures manufacturing activity in the area is expected to decline.
- Finally, at 10:00 a.m. the University of Michigan will release a revision of its February consumer sentiment index.
Also in focus this morning are oil prices and the weak dollar. Oil prices surpassed $103 a barrel for the first time Friday due to the persistent weakness in the U.S. dollar. After Bernanke's testimony, the view is that further rate cuts are ahead, which will weaken the dollar further. Investors turned to commodities as a result, offering a hedge against the falling dollar. Meanwhile, the euro reached yet another high against the dollar.
Overseas, markets declined around the globe.
Undoubtedly, American International Group (NYSE: AIG)'s report from after the close Thursday, is weighing heavily on investors this morning. AIG, the largest insurer in the U.S., lost more than $5 billion in the fourth quarter as bad credit ate into its investments and the insurer wrote down over $11 billion. As a result, AIG lost $5.29 billion, or $2.08 per share, in the fourth quarter, compared with profit of $3.44 billion, or $1.31 per share, in the fourth quarter of 2006. Financials will likely be pressured along with AIG in today's session. AIG shares are down over 4.2% in premarket trading.
Meanwhile, Dell Inc. (NASDAQ: DELL) also reported weak results in the fourth-quarter as profit dropped 6.4%, to $679 million or 31 cents per share. Excluding one time item, the company still came short of analyst expectations of 36 cents per share. Dell sales rose 10.5% to $15.99 billion, below the $16.27 billion that analysts had expected. Dell promised aggressive layoffs, but shares are down 2.25% in premarket trading.
Overseas, markets declined around the globe.
Undoubtedly, American International Group (NYSE: AIG)'s report from after the close Thursday, is weighing heavily on investors this morning. AIG, the largest insurer in the U.S., lost more than $5 billion in the fourth quarter as bad credit ate into its investments and the insurer wrote down over $11 billion. As a result, AIG lost $5.29 billion, or $2.08 per share, in the fourth quarter, compared with profit of $3.44 billion, or $1.31 per share, in the fourth quarter of 2006. Financials will likely be pressured along with AIG in today's session. AIG shares are down over 4.2% in premarket trading.
Meanwhile, Dell Inc. (NASDAQ: DELL) also reported weak results in the fourth-quarter as profit dropped 6.4%, to $679 million or 31 cents per share. Excluding one time item, the company still came short of analyst expectations of 36 cents per share. Dell sales rose 10.5% to $15.99 billion, below the $16.27 billion that analysts had expected. Dell promised aggressive layoffs, but shares are down 2.25% in premarket trading.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
