U.S. stock futures were higher Monday morning after Abu Dhabi came to the rescue of Dubai with a $10 billion bailout on a day some debt was to expire. Meanwhile, in the U.S., Citigroup announced it will repay its bailout funds.Stocks are poised to build on Friday's momentum -- blue chip stocks finished on a positive note following better-than-expected reports on retail sales and consumer sentiment. However, the tech-heavy Nasdaq composite was marginally lower.
The big story this morning is no doubt Dubai's bailout by neighboring oil-rich Abu Dhabi, which lent Dubai $10 billion on Monday. This last minute lifeline of cash infusion aimed at preventing a default of key bonds that were to expire Monday. A default could have sparked broader fears about Dubai, which could resonate elsewhere.
The Dubai government said the financing would help pay off $4.1 billion in debts owed by struggling Dubai World's Nakheel property division and due Monday. The rest would go toward bills and expenses through April. Dubai World's ability to pay $60 billion in debt was recently questioned when Dubai World said last month it would delay payment on its debt. Dubai's unwillingness to fully stand behind its state-owned corporation sparked questions about the emirate's creditworthiness.
World markets mostly rose Monday after Dubai's bailout. With the exception of Japan, Asian markets ended higher and European markets also traded in positive territory in the morning.
Of companies in focus this morning, Citigroup Inc. (C) said Monday it is repaying $20 billion in bailout money of the $45 billion it received from the Treasury Department. Citi doesn't need to pay the remaining $25 billion as the government converted it to a 34% stake in the bank. Paying back the TARP money would help Citi at least reduce government influence and allow it better control over executive payouts.
Google (GOOG) is also in the spotlight after the Wall Street Journal reported the search giant plans to market its own cell phone next year.
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Reader Comments (Page 1 of 1)
12-14-2009 @ 5:21PM
wadaguy4u said...
Does anyone know how to contact, Dr. Badih Soubra, he's an old friend i lost touch with years ago. He is involved in the middle-eastern financial markets as an adviser i believe. i thank-you in advance for any assistance in this matter. Guy B.