Futures Fall Despite Stimulus Victory 


Stocks looked set to reverse the week’s winning streak at the open Thursday, despite the progress of the $825 billion stimulus package and optimism over the “bad bank" plan.

Economic data released before the bell were predictably grim: Initial jobless claims rose by 3,000 last week to 588,000, more than expected. Durable-goods orders skidded 2.6 percent last month, slightly more than expected. Excluding transportation, orders tumbled by 3.6 percent, which was far worse than the 2.8-percent slide expected.

Still to come: December new-home sales at 10 a.m. ET.

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  • The stimulus was passed by a sharply divided US House of Representatives Wednesday, handing President Barack Obama the first major legislative victory of his tenure.

    Meanwhile, government officials have discussed pouring a further $1 trillion to $2 trillion to help backstop the banking system, the Wall Street Journal said, citing people familiar with the matter.

    The Federal Reserve signaled it would keep interest rates near zero for quite “some time” Wednesday, and said it will use unconventional tools to battle the fallout.

    But futures faced pressure from the bank stocks, as traders appeared to be booking profits from Wednesday's sharp rise on the rescue plan and stimulus momentum.

    Wells Fargo shares fell 4.4 percent in premarket trading while Citigroup was off 3.6 percent. The Financial Select SPDR exchange-traded fund that gauges the moves of the industry and contains most of its key players was off 2.9 percent premarket.

    The losses were kept in check somewhat by Ford Motor earnings. The company missed analyst estimates with a $5.88 billion loss but said it had enough cash on hand to continue operations and said it would not require federal bailout fund help. Ford shares gained 4.4 percent premarket.

    The day’s earnings were kicked off by Royal Dutch Shell, which said the fall in crude prices was hampering its bottom line. The oil major said fourth-quarter Current Cost of Supply (CCS) net profit fell 28 percent to $4.79 billon.

    In other earnings, 3M narrowly beat estimates with a 97 cent per share profit; Eli Lilly also beat with a $1.07 per share profit; and Altria met with a 37 cent per share profit.

    And the credit crisis could even affect postal deliveries as the post office may cut one day of mail delivery per week due to massive deficits, the postmaster general told Congress on Wednesday.