U.S. stock futures were significantly lower Friday morning, a day after the Dow industrials had already plunged 678 points. The Dow dropped 21% in the past 10 days. U.S. stock markets are looking to join the plunge in global markets as Japan's Nikkei 225 fell 9.6%, Hong Kong Hang Seng dropped 7%, London's FTSE 100 declined 5.5% and the German DAX 30 was down 8% to name but a few that have managed to remain open. Some global markets actually had to close today, prompting the name "Black Friday."Wednesday's coordinated rate cut didn't seem to loosen frozen credit markets as investors seem to completely lose confidence in the world's financial system. Finance officials from the G7 are meeting in Washington Friday to address the financial meltdown. On the economic front, August trade data and September import prices will be released. Oil prices plummeted to a one-year low of $82 a barrel.
General Electric (NYSE: GE) -- meanwhile this morning, GE reported results that met the lowered expectations. GE's profit fell 22% to $4.3 billion, or 43 cents per share, compared with $5.56 billion, or 54 cents, a year earlier. GE's revenue climbed 11% to $47.23 billion. Analysts polled by Thomson Reuters forecast earnings of 45 cents a share on revenue of $47.34 billion. GE recently got a $3 billion infusion from Buffett's Berkshire and raised $12.2 billion through a stock offering. Shares of GE are down about 1% in pre-market trading.
Morgan Stanley (NYSE: MS) shares are dropping again this morning, 3.6% in pre-market action as Moody's Investors Service put it on review for downgrading its credit rating. Also, an analyst slashed his price target and earnings estimates for Morgan Stanley late Thursday, as concerns mount it could become the next big victim of the credit crisis.
Citigroup (NYSE: C) shares are actually a little higher this morning after it announced late Thursday it was withdrawing from its bid to buy Wachovia (NYSE: WB), leaving a clear path for Wells Fargo (NYSE: WFC) to buy the distressed firm. WB shares are gaining 30% in pre-market trade, whily WFC's are down about 1.8%.
General Motors (NYSE: GM) and Ford Motor (NYSE: F) -- S&P put the ratings of both on review for a possible downgrade. Detroit's Big 3 "may be forced into bankruptcy by slowing economies and dwindling auto sales, Standard & Poor's analyst Robert Schulz said today."
AIG (NYSE: AIG) -- The needs of the big insurance company seem insatiable as after the original loan from the government (some of it spent in a spa), it now borrowed $9 billion more, to a total of $70.3 billion. The government had originally planned to lend AIG $85 billion but on Wednesday raised that figure 45% to $122.8 billion. Shares are declining 5% in pre-market trade.
Apple Inc. (NASDAQ: AAPL) -- the concumer tech company is expected to unveil new laptop computers next week, including a low-priced model. The event will be held Tuesday, October 14. Some analysts are expecting the laptops to start at less than $800, compared with $1,099 now, which would bring Apple closer in line with other computer makers.
Research in Motion (NASDAQ: RIMM) -- Reuters analyst Wojtek Dabrowski surmises that the recent plunge in RIM shares "could leave the company vulnerable to a takeover from a well-capitalized buyer such as Microsoft Corp. (NASDAQ: MSFT)." RIMM shares are down another 4.4% in pre-market trading to $56.45.
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Reader Comments (Page 1 of 1)
10-10-2008 @ 9:23AM
JM Bonnett said...
The circuit breaker could be in action today, European bourses are very close to being down 10% and the Nikkei was very close to being closed early this morning.
The key will be how things fare early on, past days have seen the sharpest falls occurring later in the day when the circuit breaker would be innactive. If things plunge early on however, we could be in for an early lunch.
10-10-2008 @ 1:19PM
Joey Sassalee said...
How to Fix GM – Advice from someone who worked there.
1) Cut down from five regional offices to two. One in Atlanta (east of Lake)and one in LA (west of Lake). That means Chicago, New York, and Dallas are closed. With about 250 people working in each location (750 total) at an average of $100,000 each, that is a yearly savings of $75 million. Operation cost (rent, equipment, etc.) at the three locations will save another $1.8 million. Benefits for the 750 employees will save another (at $20,000 each) another $15 million.
2) Next, there is an average of three offices per state (local offices in cities across the country), if we close them, that is another $3 million in office space.
3) Next, the District Managers work out of their house and the Zone Managers (or whatever term is given to them), could be let go. They make around $150,000 a year and there are about 75 of them. Again, a savings of $11.25 million. With benefits, a total of $12.75 million in savings.
4) Next, cut around 150 jobs at the Detroit GM Headquarters. A savings of around $18 million with benefits.
5) Next, cut Buick down to two cars (Enclave and Lucerne), cut Pontiac to one (G6), cut GMC to two (Yukon and Sierra), cut Saturn to one (Vue) – and put all cars to a new umbrella called “United GM”. This will save GM billions
6) Next, cut advertising in November, December, January, February, March, April, and May (with the exception of auto show advertising for a three week period during the show and its incentives). This will save GM around $1.4 billion.
Total Savings for GM = $123.75 million in salaries for # 1-4, $1.4 million in savings for #6, and for #5, I do not know the exact number but it should be a savings of around $25 billion.
10-10-2008 @ 8:32PM
JOJO said...
THIS KIND OF CRAP DRIVES THE MARKET DOWN SO YOU CAN MAKE A NAME FOR YOURSELF,WHY DONT YOU SAY 5 STOCKS TO GAIN?
10-11-2008 @ 4:40PM
Baffled in Florida said...
If AIG stocks are to plummet on Monday 13th October, what is the future for AIG and what is the future for the country. Where do you see the stocks going, and do the Government really own stocks in AIG, or is it just a loan, that when paid back will get the Government out of AIG.
For instance, if AIG repay 60% of the loan, will the Government reduce their ownership by 60% etc. How does this work, does anyone know?
Baffled in Florida.