Futures Point Lower as Economy Weakens
A flurry of reports indicating continued troubles for the economy ahead, particularly in employment, pushed stock futures lower.
Separate private reports showed joblessness in November hitting seven-year highs, while a productivity report showed worker output slowing though not by as much as analysts had thought.
At the same time, mortgage applications staged their largest one-week surge ever, gaining 112 percent as refinancings soared 203 percent following aggressive government moves to buy mortgage-backed securities. Mortgage rates for a 30-year loan fell to 5.47 percent in November.
It all added up to more uncertainty for the market.
"Markets are just up and down right now," Ben Lichtenstein, president of tradersaudio.com told "Worldwide Exchange."
"Ahead of the holidays, into the New Year we could see a little bit of buying come in," he added.
Research in Motion looked to be in for a rough day after the Blackberry maker cut its third-quarter earnings and revenue goals. The company said economic weakness and a stronger US dollar contributed to its troubles.
In corporate news, Bank of America's merger with Merrill Lynch could see up to 30,000 jobs cut at the banks as CEO Kenneth Lewis looks for savings of $7 billion, sources told CNBC.
The cuts, which would be three times as many as previous estimates, are expected to be mostly from the investment banking divisions.
The Big Three auto-makers submitted their requests for financial assistance to Congress Tuesday, along with justification for the vast sums. If granted, the federal assistance could run to $34 billion for General Motors, Ford and Chrysler.
GM President Fritz Henderson reiterated on NBC's "Today" show that bankruptcy is not an option for the industry and that the new bailout plan it will present Congress is the best option. GM shares were off 5 percent before the bell.
In more economic news, the November ISM services index is released at 10 am and the Federal Reserve's Beige Book is out at 2 pm.
President-elect Barack Obama said his economic recovery plan would include tax cuts and increased federal spending, but speed was of the utmost importance. He also said that state governors would have a role in shaping the stimulus plan.
Fed Governor Randall Kroszner is due to speak on the mortgage crisis at 10:15 am in Washington and Richmond Fed President Jeffrey Lacker is speaking at 1 pm in Charlotte, North Carolina.