Stocks Open Lower Ahead of Bailout Details
US stocks opened lower Tuesday as investors braced for the unveiling of the government’s latest bank bailout plan, which could relieve toxic assets from the balance sheets of bad banks.
Treasury Secretary Tim Geither will reveal the proposals to help banks at 11 am New York time, after a one-day delay. CNBC will interview Geithner after his speech, at noon. Then he's on to Capitol Hill, where he will testify before a House panel.
Some market watchers remain skeptical over the benefits of the plan and legendary investor Jim Rogers told CNBC it could even make things worse. The bailout will plunge the US further into debt and it is designed by the same people who failed to forecast the crisis in the first place, Rogers said.
Meanwhile, President Obama has been garnering support for his $800 billion spending and tax-cutting stimulus bill as it works its way through the legal system. The Senate is due to hold a final ballot on the bill at noon.
Federal Reserve Chairman Ben Bernanke will also speak at 1 pm about the Fed's liquidity efforts at the House Financial Services Committee.
Banks shares were mostly lower, including Bank of America, which shed 2 percent. But Citigroup ticked higher.
Hartford Financial shares fell sharply after the property and life insurer's credit rating was cut. Rival MetLife also declined.
UBS shares jumped after the bank announced it had inflows in January after a long period of outflows, indicative to some analysts that it was beginning to rebound.
And investors were encouraged by the latest sign of thawing in the credit market: Cisco sold $4 billion in bonds.
Shares of Qwest Communications advanced as the company reported its profit fell 49 percent but beat expectations.
Goldman Sachs was the latest company to cancel plans to hold a staff event in Las Vegas. Goldman Sachs will now hold its three-day conference in San Francisco, but it is not clear whether the move will save costs.
Boeing shares skidded after the aerospace giant said that the falling value of its planes meant its fourth-quarter net loss was four cents a share wider than it reported late last month. Another flurry of earnings is due before the bell.
On the economic front, December’s wholesale trade data is expected to be released at 10 am ET.
TUESDAY: Geithner to testify before a House 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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