Alcoa, Citi Hit Futures; Bernanke Helps
Futures were indicating a negative opening for the market Monday but were well off their lows, as Citigroup shares tumbled toward the $5 mark but Federal Reserve Chairman Ben Bernanke raised the market's mood.
Bernanke said an expected stimulus plan will provide a "significant boost" to the flagging economy while calling for continued aggressive governmental actions to lessen the recession's impact.
Stock futures had been fallen on a pervasive negative move to open earnings season and fears over Citi's position.
Alcoa reported a fourth-quarter loss of 28 cents a share, excluding one-time items, compared with expectations for a loss of 10 cents a share.
Shares of Alcoa fell 1.6 percent in premarket trading.
Citigroup shares were under more pressure amid concerns over steep losses the company is expected to see plus its deal with Morgan Stanley to shed its brokerage arm, Smith Barney. Citi was off 2.5 percent in premarket trading and heading toward the critical $5 mark that could trigger institutional investors to dump the stock.
The market also faced pressure from a further drop in crude oil , which fell nearly $1 and was under $37 a barrel. Shares of BP dropped nearly 3 percent premarket.
Futures were off their lows, though, as Federal Reserve Chairman Ben Bernanke delivered remarks at the London School of Economics. The speech is the first from Bernanke since the central bank moved to its policy of near-zero rates and quantitative easing.
Most importantly for the markets, there will be a question-and-answer session.
Back in Washington, the White House formally asked Congress for the second half of the $700 billion TARP program, at the behest of President-elect Barack Obama.
Meanwhile the Bernard Madoff fraud continues to reverberate across the globe, with Spain investigating Banco Santander's loss of more than $2.9 billion of its clients' money, the Wall Street Journal reported.
Looking to earnings, broker Charles Schwab will report numbers ahead of trading. And on the economic calendar, the government will release November trade balance numbers at 8:30 am.