Futures Slump After GDP Report
Futures started the day lower as investors bailed out of Citigroup, then slipped further after a report showed economic growth slowed more than previously expected.
Gross domestic product declined 6.2 percentin the fourth quarter, worse than the 3.8 percent reported in the first look at the final quarter of 2008, as exports plunged and consumer spending slowed dramatically.
Still to come is the Chicago Purchasing Managers' Index for February at 9:45 am ET and consumer sentiment for February five minutes later.
Citigroup tumbled nearly 40 percent in pre-market trading and was poised to open at its lowest level since November 1990 following news that the government will be significantly increasing its stake in the troubled bank.
A Treasury official told CNBC the government will be offered the lowest price available to private investors, to convert preferred shares into common equity. Get Dow 30 Extra-Hours Quotes Here
Sentiment that the Citi plan would be dilutive to shareholders snaked through other banks, with Bank of America tumbling more than 13 percent premarket and Wells Fargo falling nearly 9 percent.
Meanwhile, the government’s "stress-test" for determining the financial strength of the country’s top 20 banks came under fire from analysts. Some fear that banks may hoard cash and cut lendingin order to present a more robust balance sheet to regulators.
The European banking sector remained in focus as Lloydsunveiled $14.28 billion loss for 2008, following Royal Bank of Scotland’s $34.2 billion full-year loss revealed Thursday. Lloyds is expected to join RBS in finalizing plans to use the UK government’s toxic assets insurance scheme.
In the technology sector, makers of BlackBerry Bold, Research In Motion, were feeling the heat after Japan's biggest cell-phone operator, NTT DoCoMo, halted sales of the hand-held email device. Users have complained that the gadget can overheat when the battery is charging.
Numerous companies were scheduled to post earnings numbers ahead of the bell, including Blackstone, Magellan Health and AES Corp .