US stock index futures edged lower ahead of the open Wednesday, as investors waited for the next round of earnings and hoped for more details on the government’s stimulus package.
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Stocks snapped a three-day losing streak Wednesday and closed higher following better-than-expected earnings from Merck and signs of progress from a key housing report.
Executive paychecks were in the spotlight with limits for TARP-tapping companies expected to be unveiled, an industry source told CNBC. A cap of $500,000 could be set for senior executives’ annual salaries under the plans from President Barack Obama.
An early round of earnings reports brought more bad news.
Time Warner reported a fourth-quarter loss of $4.47 a share due to a $24.2 billion writedown related to its cable, publishing and AOL assets. Shares fell 1.6 percent in premarket trading.
Also, Kraft Foods saw a 72 percent drop in profit, to 11 cents a share, which it attributed to costs related to a restructuring program. Kraft shares fell 6 percent premarket.
The Obama administration is wrestling with the details of a ‘bad bank’ plan, which could form part of a wider package of measures to be unveiled next week, according to a source familiar with the situation.
In corporate news, Wells Fargo cancelled an employee event in Las Vegas in an attempt to save costs and face. The financial services company received $25 billion in government funds only months ago.
Also, Panasonic , the world's largest maker of plasma televisions, said it would cut 15,000 jobs and shutter 27 plants worldwide as it adjusts to the global economic slowdown.
On the earnings front, telecom equipment maker Alcatel-Lucent revealed a $5.03 billion impairment charge in fourth-quarter 2008 due to the "drastic deterioration" of the economic outlook. Shares gained 3.7 percent premarket.
In economic news, a jump in refinancing helped boost mortgage applications last week, while outplacement firm Challenger Gray & Christmas reported a spike in planned layoffs to their highest level in seven years.
The ADP national employment report for January is due out at 8:15 am. January’s ISM services index is due out at 10 am and US oil inventory figures are set to be released at 10:30 am.