Stock futures were lower this morning, indicating the beginning of what could be another down day on Wall Street as more troubling news from the financial industry was reported, while UPS warned of a slowdown in its delivery business.On Tuesday, U.S. stocks ended lower following a revenue warning from Advanced Micro Devices (NYSE: AMD), a lackluster earnings report from Alcoa Inc. (NYSE: AA), a dividend cut from Washington Mutual (NYSE: WM) and the Federal Reserve minutes, all of which affecting investors' sentiment. The Dow industrials closed 35 points lower, or 0.29%, the S&P 500 lost 7 points, or 0.51%, and the Nasdaq Composite dropped 16 points, or 0.68%.
This morning, given the very light economic calendar consisting of February wholesale inventories at 10:00 a.m. EDT, the Street will likely focus -- once again -- on the troubles in financials. The top story on the Wall Street Journal is about the options the Fed is considering to alleviate the credit crunch further including "contingency plans for expanding its lending power in the event its recent steps to unfreeze credit markets fail." While such plans aren't surprising and even welcome, the report comes after the Fed showed concern the economic downturn could last into 2009 when it released Tuesday the minutes of its FOMC meeting.
And as if that wasn't enough to squash some hopes some investors lately had that we have seen the bottom, Citigroup (NYSE: C) came and reported it is close to a deal to sell $12 billion of loans at a loss to Apollo Management LP, Blackstone Group LP (NYSE: BX) and TPG Inc. as part of an effort to shrink the bank's balance sheet. Again, not surprising after what Citi's CEO said only Tuesday, and even a positive development, but it goes to show the magnitude of the problem and potential losses. Indeed, shares of Citi rebounded nearly 2.7% in premarket trading.
Still in financials, Standard & Poor's late Tuesday slashed its ratings on four mortgage insurers.
And not just financials are dampening the mood this morning, United Parcel Service (NYSE: UPS) cut its first-quarter profit guidance after the closeTuesday, as it was squeezed from both sides. On the one hand the weakening economy has reduced domestic package volume, while on the other higher fuel prices increased costs. Shares of UPS fell nearly 2.9% in premarket trading.
Earnings are due out of Circuit City Stores (NYSE: CC) and, after the close, Bed Bath & Beyond (NASDAQ: BBBY).
Oil prices were steady Wednesday ahead of the release of weekly U.S. inventories at 10:30 a.m. EDT that is expected to show gasoline inventories fell last week.
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