Before the Bell: Futures Fall as Bank of America Reports Big Loss

Posted Jan 20th 2010 8:10AM by Melly Alazraki
Filed under: Before the Bell, International Markets, China, Market Matters, International Business Machines (IBM), Bank of America (BAC), Economic Data, Oil

U.S. stock futures fell Wednesday, indicating Wall Street is poised for a lower open, after Bank of America reported a big loss. Other concerns weighing on the market include Chinese clampdown on lending and the change in the balance of power in Washington. Meanwhile, investors will continue to focus on the many earnings and economic indicators coming out this morning.

U.S. stocks hit a new 15-month high Tuesday as IBM led tech stocks higher ahead of its earnings report late Tuesday, and health-care shares rose as the health care and insurance reforms hung in the balance. The Dow Jones Industrial Average rose 115 points, or 1.1%, the S&P 500 rose 14 points, or 1.3%, and the Nasdaq Composite gained 32 points, or 1.4%.

In addition to a wave of earnings, a slew of economic reports are due out:

At 8:30 a.m., December housing starts and building permits will be reported. Building permits are expected to have dipped slightly to an annual rate of 580,000 last month, according to Briefing.com. Housing starts are expected to remain unchanged at an annual rate of 575,000.
At the same time, the December reading of Producer Price Index will be released. This inflation gauge measures prices at the wholesale level. The PPI is expected to be flat for December, after gaining 1.8% the prior month. Core PPI, which excludes food and energy prices, is expected to have inched 0.1% higher, after climbing 0.5% the month before.

Overseas, China's main stock market led global exchanges lower Wednesday as investors fretted about the possibility of further lending curbs in the country.

China will slow its massive lending spree and step up monitoring of banks as it tries to prevent speculative bubbles in real estate and other assets while keeping the country's economic recovery on track, a top regulator said Wednesday, the AP reports.

Meanwhile, oil prices fell below $78 a barrel Wednesday amid expectations of a bearish weekly crude inventory report coming out at 10:30 a.m. and a stronger dollar.

Among the many stocks in the news are International Business Machines (IBM), which posted strong earnings results late Tuesday, and Bank of America Corp. (BAC), which said Wednesday its fourth-quarter loss widened to $5.2 billion, or 60 cents a share, more than estimates.

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