Futures Fall as Economic Fears Mount
US stock index futures pointed to a further slump at the open Monday as investors braced for another round of dire economic indicators along with the next batch of corporate earnings.
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Consumer spending fell 1 percent in December, as expected, while income fell 0.2, half of the 0.4-percent decline expected. Still, November was revised to show a bigger drop than expected.
Still to come: The ISM manufacturing index for January and construction spending for December, both due out at 10 a.m. ET.
The economic woes were reflected in another rough batch of earnings reports.
Toy maker Mattel said its quarterly profit fell 46 percent, far worse than analyst expectations, with the company blaming a stronger dollar and the weakest holiday shopping season in years for its troubles.
Also, health care company Humana reported a 28 percent drop in profit, though the company predicated a big turnaround this year, raising its guidance to expected earnings per share of $5.90 to $6.10 for the full year compared to $3.83 for 2008.
Weakness in overseas trading also weighed on the domestic markets as European stocks fell about 2.5 percent.
On the plus side, shares of Hartford Financial rose 5.6 percent in premarket trading after Barron's on Sunday wrote that the company is a "compelling buy" on expectations that it will rebound as the value of its bond holdings recovers.
Stocks ended their worst January on record Friday with a sharp fall on the back of GDP data, which confirmed the economy contracted at its fasted pace for 27 years.
The Dow lost 9 percent during January, while the S&P fell 8.8 percent and the Nasdaq slipped 6.5 percent. Many analysts believe that a poor performance in January spells weakness for the year as a whole.
Other earnings dule include Sysco and First State Bank .
Among the active stocks before the bell included Alcoa, which fell more than 1 percent on news that Chinese aluminum company Chinalco held talks with Rio Tintowith a view to acquiring minority interests in various Rio businesses, Chinalco said. Rio pointed out that a tie-up was not yet a done deal.
Alcoa teamed with Chinalco last year to buy about 9 percent of Rio Tinto.
Ford Motor shares also fell about 1 percent after Barclay's Capital downgraded the automaker, saying it will need government bailout cash by the end of 2009.
Banks were broadly lower premarket, with Bank of America and Citigroup both falling more than 3 percent.
The Obama administration will focus on Wall Street bonuses and executive compensation this week, instead of the financial bailout package as expected, CNBC learned from industry sources.
The administration discussed measures to ease the credit crisis with financial industry representatives over the weekend, including proposals for a 'bad bank' to buy toxic assets.
CNBC.com has now learned that the administration is considering three options for institutions: a) a bad bank, b) more capital injections into institutions and c) a so-called "ring fence" concept, in which the government uses a combination of guarantees and insurance to cover bad assets within an institution without technically removing them from the balance sheet.
Meanwhile, an Associated Press review of visa applications revealed that some US banks had sought government permission to bring thousands of foreign workers into the country for high-paying jobs. The report sparked questions over the banks’ employment policies as the number of US jobless continues to rise.