Before the bell: Futures drift lower as oil sets another record high
Posted by: in Latest NewsFiled under: Before the bell, Earnings reports, Deals, General Motors (GM), Market matters, Citigroup Inc. (C), Anheuser-Busch Cos (BUD), Bank of America (BAC), Research in Motion (RIMM), Goldman Sachs Group (GS), Amer Intl Group (AIG), Oracle Corp (ORCL), Palm Inc (PALM), Economic data, Oil
U.S. futures were mixed to lower early Friday morning, a day after stock markets sold off, ending at their lowest level in almost two years. Still, with oil prices reaching another record in Asia, it’s questionable whether stocks could indeed stage a recovery.
On Thursday, U.S. stocks sank to lows not seen in nearly two years after Goldman Sachs (NYSE: GS) downgraded investment banks including Citigroup (NYSE: C) and General Motors Corp. (NYSE: GM) to Sell and as Wall Street was also worried about the outlook for tech stocks as both RIM (NASDAQ: RIMM) and Oracle (NASDAQ: ORCL) reported quarterly results Wednesday, giving a tepid outlook. Topping it all were oil prices reaching $140 a barrel. The Dow Jones Industrial Average fell 358 points, or 3.03%, the S&P 500 lost 38 points, or 2.94%, and the Nasdaq Composite dropped 79 points, or 3.33%.
Usually, a day after such a selloff, buyers tend to come in, this morning we also woke up to news that oil prices climbed to a record above $141 a barrel in Asian trading, which might dampen the mood on Wall Street again. Light, sweet crude for August delivery rose as high as $141.71 a barrel before pulling back to $141.10. The previous trading record for a front-month contract was $139.89, set on June 16.
Economic releases today include Might personal income and spending at 8:30 a.m. EDT. With it, the core PCE inflation indicator, the Federal Reserve’s preferred inflation gauge is also due out.
In corporate news, the board of Anheuser-Busch Cos. (NYSE: BUD) has unanimously rejected InBev NV’s $46.35 billion takeover bid, calling it “financially inadequate.”
In financials, American International Group Inc. (NYSE: AIG) plans to absorb as much as $5 billion of any losses on sales of the investments, up from a previous commitment of $500 million. Meanwhile, Bank of America (NYSE: BAC) stated Thursday it will cut about 7,500 jobs after it closes its acquisition of Countrywide Financial Corp. (NYSE: CFC).
And finally, Palm (NASDAQ: PALM) shares are dropping yet another 4.4% in premarket trading after the smartphone maker posted a fourth-quarter loss after a profit a year earlierdespite strong sales of its new, cheaper Centro phone.
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