Futures Pounded by Dismal Jobs Outlook
Stock futures stumbled on more dismal news on the employment front, with a Dow component announcing severe cuts and separate reports painting a dismal picture of the broader economy.
Dow component Alcoa, the biggest U.S. aluminum producer, said it would slash more than 15,000 jobs, halve capital spending and sell four businesses as it reduces aluminum production. The cuts come less than a week before Alcoa -- the traditional earnings season curtain raiser -- is scheduled to report its fourth-quarter results.
Alcoa shares dropped more than 5 percent in premarket trading.
At the same time, both the ADP National Employment Report and job placement firm Challenger, Gray and Christmas indicated sharp declines in December numbersthat indicated a considerable weakness in corporate health.
Asian stocks ended mostly higher as optimism over a massive stimulus package in the U.S. continued, while European stocks were dragged lower by energy stocks and banks.
U.S. banks will have to raise capital again in 2009, and a sharp increase in credit-rating downgrades on mortgage-related securities will lead to further stresses on their capital, prominent banking analyst Meredith Whitney said.
Also in the banking sector, Kenneth Lewis, Bank of America's chief executive, recommended that his board of directors not pay him a bonus for 2008, according to press reports confirmed by a bank spokesman.
The bank, which is trying to raise cash to weather the financial storm, is selling a $2.83 billion chunk of its holding in China Construction Bank at a 12 percent discount, according to a Reuters report.
Shares fell 1.6 percent premarket.
In earnings news, agriculture giant Monsanto is due to report earnings before the bell.
And shortly after the market open, at 10:35 am New York time, weekly oil inventories data will be released.
Texas oil billionaire Boone Pickens predicted that oil prices will rise above $100 a barrel by the end of 2010 as the global economy recovers.