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Global Economic Woes Drag on Futures

CNBC.com
Tuesday, 11 Nov 2008 | 7:58 AM ET

Stock index futures pointed to another down day for Wall Street Tuesday as the positive effect of China's stimulus package gave way to renewed fears about the strength of the global economy.

Futures were indicating the major indexes each to fall more than 1 percent each at the open.

Asian and European stocks saw resumed selling, following the slightly lower Wall Street close on Monday.

Trading volumes may be light as US bond markets will remain shut to mark Veteran's Day.

Stock and commodity trading will be open as usual, with energy prices making an early break lower. US crude slipped below what some considered an important $60 levelas traders anticipated that the global recession would carve steep cuts into demand.

In corporate news, Citigroup sought to stem the flow of home repossessions by becoming the latest mortgage lender to try to help borrowers stay in their homes. The bank launched a program aimed at vulnerable borrowers, which it said could refinance $20 billion home loans.

Citi shares dropped about 2 percent in premarket trading.

Mobile phone group Vodafone cut its full-year revenue outlook for the second time in four months on Tuesday but said it would maintain profits and boost free cash flow by cutting 1 billion pounds ($1.6 billion) of costs.

The move was greeted enthusiastically by investors who sent Vodafone shares up 8 percent in premarket trading.

But in more bad news for housing, luxury home builder Toll Brothers said its quarterly revenue fell 41 percent, thwarting signs of stability the company said it saw in September.

US automakers pulled into the center of a political storm as President-elect Barack Obama urged outgoing President George W. Bush to support immediate emergency aid for the struggling sector. Analysts remained divided on the benefit of bailing out automakers.

Meanwhile, Goldman Sachs advised clients to bet against bonds which it sold on behalf of the state of California, the Los Angeles Times reported. The company didn't let the office of California Treasurer Bill Lockyer know that it was proposing a way for clients to profit from California's economic downturn, the paper said.

The news added more pressure to Goldman shares, which have been suffering a stunning decline this year. Shares fell more than 3 percent, below $69 to levels not seen since 1999.

Retail will also be in focus as earnings from TJ Max Owner TJX reports results before the opening bell.

Earnings after the bell Monday didn't help the market's mood, as coffee retailer Starbucks said quarterly profit plunged 97 percent from the same quarter a year ago.

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