U.S. stock futures were higher Monday morning, indicating stocks could rise at the open after China Sunday announced a $585 billion stimulus package, which includes tax cuts and infrastructure spending. This cause world markets to climb as well as commodities. Oil followed stock markets and jumped above $64 a barrel. Another boost to stocks was further aid from the government to AIG.[Update 8:25: Circuit City Stores Inc. (NYSE: CC) filed for bankruptcy. Shares are down 52% in premarket trading to 12 cents.]
American International Group (NYSE: AIG) -- The government on Monday provided new financial assistance to the troubled insurance giant, including pouring $40 billion into the company in return for partial ownership. Altogether, AIG got around $150 billion. AIG shares are shooting up over 21% in premarket trading.
General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F) and Chrysler are also moving closer to a bailout as Obama's chief of staff, Rahm Emanuel, called the industry an "essential" part of the U.S. economy. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said that the administration should consider expanding the $700 billion financial industry bailout to include car companies. With this kind of support, still undecided is the size and timing of any aid. GM shares are up 2.3% (it was hit by a downgrade from Barclays) and Ford shares are up nearly 5% in premarket trade. [Update 9:10: as expected, with the GM downgrade, it is down over 10% in premarket trading, Ford is only slightly down thought]
NRG Energy Inc. (NYSE: NRG) on Sunday rejected an unsolicited $6.1 billion all-stock bid from nuclear power giant and utility operator Exelon Corp. (NYSE: EXC), calling it too low. NRG shares jumped 6.8% in premarket trading.
Citigroup, Inc. (NYSE: C) is in talks to buy a regional bank that operates in areas that overlap with the company's focus in the U.S. Northeast, California and Texas, according to sources of the Wall Street Journal. The identity of the target bank is unknown. C shares are trading 3.8% higher in premarket action.
Nortel Networks Corp. (NYSE: NT) swung to a third-quarter net loss of $3.4 billion, or $6.85 a share, hit by several charges. Revenue fell 14% to $2.32 billion. The company also warned that its results for the year would come at the bottom of its previous guidance. Nortel unveiled further restructuring measures expected to save $400 million annually by 2009 that include additional job cuts. NT shares are jumping 11.11% down in premarket trading (thanks GTK for pointing this out!) .
Starbucks Corp. (NASDAQ: SBUX) is due to report quarterly results after the close. It is forecast to post earnings of 13 cents a share in the fiscal fourth quarter, according to FactSet Research.
McDonald's Corp. (NYSE: MCD) is scheduled to report October same-store sales.
Analyst calls:
- Wells Fargo (NYSE: WFC) was upgraded by Credit Suisse from Neutral to Outperform. WFC shares are trading 2.3% higher in premarket action.
- Deutsche Securities downgraded a bunch of solar stocks including Canadian Solar (NASDAQ: CSIQ), First Solar (NASDAQ: FSLR), Sunpower (NASDAQ: SPWRA) -- from Buy to Hold. It downgraded Suntech Power (NYSE: STP) from Hold to Sell. Nonetheless, solar shares seem to start strong today.
- Barclays Capital downgraded clothiers Abercrombie & Fitch (NYSE: ANF), Ann Taylor (NYSE: ANN) and Urban Outfitters (NASDAQ: URBN).
Before the bell: Stocks ready to climb on hopes of continued low rates
Why do we have a weak dollar?
Holiday hiring slow for retailers
