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FedEx Adds to Dour Market Mood

CNBC.com
Wednesday, 18 Jun 2008 | 8:26 AM ET

Wall Street was bracing for another rough day as investors worried over earnings reports and oil inventories, with bad news from Federal Express adding to the downbeat mood.

Stock index futures added to morning losses following FedEx's announcement that it missed earnings estimatesand that the environment for the next year would be difficult.

FedEx shares fell more than 5 percent in premarket trading.

Banks stocks globally had fallen ahead of Morgan Stanley's earnings, which added to the pessimism when the investment banker said its profit tumbled to $1.03 billion from $2.58 billion a year earlier.

Morgan Stanley shares fell more than 4 percent premarket.

President Bush will make an announcement on Wednesday about energy and call on Congress to pass legislation lifting a ban on offshore oil drilling, the White House said.

Oil inventories data are due at 10:35 am New York time and investors are looking to see whether the announcement that the Saudis will be acting to the stockpile will be overshadowed by the numbers.

In corporate news, Microsoft said it had purchased privately held digital television advertising technology company Navic Networks, but the terms of the deal were not disclosed.

Activist investor Olivant has raised its stake in Swiss bank UBSto 2.5 percent, saying it had fully supported the recent rights issue. Olivant, headed by former UBS chief executive Luqman Arnold, said in April it had taken a 1.1 percent stake and called on the bank to reform and consider splitting up.

British bank RBS has warned its clients that the next few months will be hardfor stocks and credit markets because rising inflation means central banks will have their hand tied, the Telegraph reported.

In earnings news, Morgan Stanley will report results before the bell and its profit is expected to have fallen by around 59 percent.

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