Futures Jump on China Plan, AIG News
Stock index futures pointed to a sharp rally at the open Monday, thanks to developments in the financial sector and China's announcing of a near-$600 billion economic stimulus plan over the weekend.
Insurer American International Group posted a bigger-than-expected loss for the third quarter before the bell. AIG's adjusted net loss was $3.42 per share, or $9.24 billion, for the quarter, while analysts had on average expected a loss of 90 cents a share.
But the company also confirmed it has restructured its bailout package, with the government taking a $40 billion capital stake in the company.
AIG shares soared 19 percent in premarket trading on the morning's developments.
Also in the financial sector, Citigroup is planning to buy an unnamed U.S. regional bank after being thwarted in its pursuit of Wachovia, the Wall Street Journal reported.
Citi shares gained 2.5 percent premarket.
Commodities stocks rallied across Asia on anticipation of the plan boosting raw materials demand. Tokyo finished 5.8 percent higher. European markets were also higher, with mining shares leading London more than 3 percent higher.
Wall Street could be set to cut 70,000 jobs as it prepares its budget for the next year, the Financial Times reported.
And HSBC reported a profit in its latest quarter, despite writing off $4 billion in bad U.S. home loans.
But while the bank said its US earnings were in line with expectations, it projected a downturn for the near- and mid-term, sending shares lower by 2 percent.
Automarkers also continued to come under pressure, with General Motors shares tumbling more than 10 percent premarket after Deutsche Bank cut its opinion on the company from hold to sell and set a price target of $0. Deutsche said GM may not be able to continue operations past December without government help.
Elsewhere, Circuit City, the No.2 consumer electronics retailer, filed for bankruptcy protection a week after it said it would close 185 stores and eliminated 17 percent of its workforce. Circuit City shares lost about half their value premarket after closing at 25 cents Friday..