Futures Rebound after Inauguration Day Beating
U.S. stock index futures pointed to a higher open for Wall Street Wednesday as investors hope President Barack Obama's economic team will bring clarity to the markets.
On Tuesday, the Dow ended below 8,000 for the first time in two months and marked the index's worst decline on Inauguration Day in history.
President Obama's nominee for Treasury Secretary, Timothy Geithner, is likely to get grilled during a hearing in the Senate over about his failure to pay tens of thousands of dollars in taxes when he was working as an International Monetary Fund official, but his expertise may be too precious to be lost, and he looks on track to be confirmed.
Better-than-expected news came on the earnings front from IBM, which beat Wall Street estimates for quarterly earnings, due to tight cost controls and a lower tax rate. IBM also forecast a higher-than-expected 3 percent rise in 2009 earnings per share.
Shares gained 4.7 percent in premarket trading.
Also in the technology sector, Swedish telecom equipment giant Ericsson posted a stronger-than-expected fourth-quarter profit but announced 5,000 job cuts as it seeks deeper cost cuts. The stock rose more than 14 percent premarket.
Meanwhile, General Motors expects the money from a government aid package to arrive in the next few days, as the giant carmaker faces a cash shortage.
Fritz Henderson, GM's president and chief operating officer, said that without the second installment of $5.4 billion, the company would run out of cash long before the end of March. The stock rose more than 2 percent in Europe.
And Goldman Sachs cut CNBC parent General Electric's share price target to $15 from $17 and its earnings forecast to 36 cents per share from a previous estimate of 45 cents, but said the company's industrial cash flow can sustain its dividend this year. Shares were slightly down ahead of trading.
In earnings, fund manager BlackRock saw its shares slip 3.3 percent after it said fourth-quarter net income fell 84 percent and its earnings were 68 cents a share, badly missing estimates of $1.26.
Also, United Tech said fourth quarter profit rose 8 percent, translating to $1.23 a share and beating analyst estimates by a penny.
Delta Airlines and US Bancorp are among companies also reporting earnings before the bell.
Bank stocks got crushed Tuesday but were indicating higher for Wednesday's trading.
Citigroup shares picked up more than 10 percent premarket after tumbling 20 percent the previous day, while Bank of America was called 3.5 percent higher after losing nearly 30 percent Tuesday.
And Wal-Mart saw its shares slip 1 percent after Credit Suisse cuts its outlook for the world's leading retailer from "outperform" to "neutral."
On the economic front, weekly mortgage applications data will be released at 7 am New York time.
Asian stocks closed down while European markets were also trading lower, dragged down by nationalization fears for the banks.