Futures Off Lows as AT&T Shows Gain
US stocks looked set to give back some the gains from the previous session at the open Wednesday, after Federal Reserve Chief Ben Bernanke soothed investors by stepping back from bank nationalization plans and saying the recession may end this year.
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President Barack Obama also sought to add confidence to the recession-weary market during his address after the close Tuesday. But he was careful not to down-play the severity of the ensuing economic crisis.
Bernanke will return to Capitol Hill for the second part of his semi-annual testimony on economic and monetary policy at 10 am New York time.
Futures were off their morning lows thanks in part to a gain of 1.3 percent for AT&T, which JP Morgan upgraded to overweight.
Major indexes were indicating drops of less than 1 percent at the open.
In corporate news, Ford Chief Executive Alan Mulally and Executive Chairman Bill Ford will have their salaries slashed by 30 percent for this year and next, Bill Ford said in company-wide memo. And Ford's board gave up all cash compensation for the current year.
Ford shares gained 8 percent in premarket trading.
In the banking sector, Merrill Lynch missed estimates by posting a loss of $15.84 billion in the fourth quarter. The loss was more than $500 million higher than the expectations from Bank of America .
Bank of America shares gained 5.3 percent premarket after initially falling.
Citigroup shares also gained, rising more than 6 percent as traders grew more comfortable with the bank's future prospects on the heels of Bernanke's comments.
The state of the housing market will be the spotlight at 10 am as January’s existing home sales figures are released.
In earnings, bond insurer Ambac posted a fourth-quarter loss of $2 billion that was less than the previous year but far worse than analyst projections. The loss translated to $6.79 a share, compared to estimates of a 68-cent loss.
Ambac shares fell 4 percent premarket.
Also, high-end retailer Saks missed analyst estimates with a $98.8 million loss that CEO Steve Sadove attributed to an economy that "perhaps is the most challenging that the company has faced in its 84-year history."
Saks shares lost 1 percent premarket.
Elsewhere, shares of heavy equipment vendor SPX gained 4.3 percent premarket after the company swung to a fourth-quarter loss but reported revenue that was 17 percent higher than last year.
Discovery Communications saw its shares rise more than 9 percent premarket even as it missed revenue expectations and gave a full-year outlook below consensus. The producer of Discovery Channel and the Learning Channel nonethless expressed optimism for the year ahead.