Stocks Fall as Bank Bailout is Delayed
US stocks opened lower Monday as the much-anticipated bank rescue plan was delayed for another day.
It is hoped the delay will give lawmakers time to settle their differences over the broader $827 billion economic stimulus package, which is expected to be passed by the Senate on Tuesday. President Obama wants the bill on his desk by mid-month.
Meanwhile, the Obama administration is piecing together a mortgage-rescue program, which could see Fannie Mae and Freddie Mac ease payments for hundreds of thousands of borrowers, Reuters reported citing sources close to the situation.
U.S. bank stocks rallied amid hopes that the rescue plan would help save financial stocks from total decimation.
Bank of America was up about 10 percent, while Citigroup gained more than 3 percent. Fifth Third and Hartford Financial soared.
In Europe, UK officials and the public are outraged by bonus plansat banks that received taxpayer bailout funds.
Meanwhile, Barclays , which has not received government money, reported a 2008 profit that topped expectations but still said bonuses will be halved. Traders approved of the moves, sending shares up more than 10 percent.
Illustrating the global impact of the slowdown, Nissan Motor said it will slash 20,000 jobs, or 8.5 percent of its global work force, in the next year as the Japanese auto maker braces for its first annual loss in nine years.
General Motors is expected tofire up to 5,000 salaried employees Bloomberg reported. Also, the auto maker is in talks to take back part of parts maker Delphi and products czar Bob Lutz will retire at the end of the year.
On the earnings front, Whirlpool skidded after the appliance maker reported its profit dropped 76 percent, badly missing estimates.
McDonald's shares rose after the fast-food giant reported its same-store sales jumped 7.1 percent in January.
NYSE Euronext missed analysts’ expectations with a 20 percent drop in fourth-quarter profit as currency fluctuations hurt the exchange operator’s bottom line.
And Beazer Homes said it narrowed its loss on less drastic writedowns, but its loss of $2.08 a share was still slightly worse than analysts expected.
Pfizer shares ticked higher after UBS upgraded the company's shares to "buy" from "neutral."
TUESDAY: Geithner to testify before a Senate panel (2:30pm ET); Fed's Bernanke and Dudley speak; wholesale trade; Earnings from DirecTV, Applied Materials and Nvidia
WEDNESDAY: House hearing with TARP CEOs; Weekly mortgage applications; international trade; weekly crude inventories; Fed's Evans speaks; Earnings from Ingersoll-Rand, Sanofi-Aventis
THURSDAY: Retail sales; weekly jobless claims; business inventories; Earnings from Coca-Cola, Aetna, Marriott and Viacom
FRIDAY: G7 finance ministers meet in Rome; Consumer sentiment; Earnings from Pepsi
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