Before the bell: Huge rally expected; financials (GS, WM, WB, MS) up big; ORCL, PALM respond to earnings

Posted Sep 19th 2008 8:08AM by Melly Alazraki
Filed under: Before the Bell, Major Movement, International Markets, Earnings Reports, Microsoft (MSFT), Starbucks (SBUX), General Motors (GM), Market Matters, Citigroup Inc. (C), JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs Group (GS), Morgan Stanley (MS), Oracle Corp (ORCL), Wachovia Corp (WB), Washington Mutual (WM), Palm Inc (PALM), Lehman Br Holdings (LEH)

U.S. stock futures were much higher Friday, indicating stocks could have a sharply higher start following Thursday's late-session rally. Investors are encouraged by a possible government plan to buy up bad assets from financials. The Securities and Exchange Commission also temporarily banned on short selling on 799 financial institutions. The U.K. has taken a similar action. In response, stocks world wide surged.

Financial stocks indeed rose in pre-market trade. Goldman Sachs (NYSE: GS) is up over 21%, Wachovia (NYSE: WB) up over 24%, Washington Mutual (NYSE: WM) up over 35%, Citigroup (NYSE: C) up over 17%, Bank of America (NYSE: BAC) up over 18% and JP Morgan Chase (NYSE: JPM) up about 9% to name a few.

Morgan Stanley (NYSE: MS), which is also rallying nearly 25% in pre-market trade, is apparentlyI in talks with China Investment Corp. on selling a stake of up to 49% to , as opposed to merging with Wachovia, the Financial Times reported.

Oracle Corp. (NASDAQ: ORCL), reported better-than-expected quarterly results and raised its outlook. The stock is up 6% in pre-market trading.

Palm Inc. (NASDAQ: PALM) shares, however, are down 9% in pre-market trading after initially reacting positively to the quarterly results Thursday in after-hours trade. The smartphone maker reported overall better-than-expected quarterly results even as its net loss widened.

General Motors (NYSE: GM), trying to respond to U.S. customers shifting demand, is shuffling its U.S. product plans. It will no longer build a small, seven-seat crossover wagon for its Chevrolet brand in North America but instead bring another small car to the U.S. from Asia. GM, which has exposure to troubled mortgage assets through its partly-held GMAC arm, saw its share move up over 6% in pre-market trading.

Lehman Brothers Holdings Inc. is said to be in talks to sell some Japan assets to Sumitomo Mitsui Financial Group Inc., according to Bloomberg sources.

Starbucks Corp. (NASDAQ: SBUX) announced its China operation will stop using milk from supplier Mengniu Dairy Co., one of China's largest dairy companies, until further notice following the poisoned milk scandal.

After overall negative response to the Jerry Seinfeld ads, Microsoft's (NASDAQ: MSFT) second phase commercials of the $300 million ad campaign are live. While they still don't talk about Vista features, Techcrunch thinks "they do try to break the stereotype that cool and interesting people use Macs, and everyone else is on a Windows machine." You can watch them there.

Tags: bac, c, featured, gm, gs, inthenews, jpm, leh, ms, msft, orcl, palm, sbux, wb, wm