Futures Rise as Banks Recoup Some Losses

U.S. stock index futures indicated a higher open for Wall Street on Tuesday after Monday's plunge and despite more bad news from the banking sector.

Bank stocks, in fact, were leading the early rise for futures, which were indicating a gain of about 2 percent across the board for the major indexes.

But analysts said the bounce was likely to be temporary and that stocks may test the lows reached in October again.

"No doubt we can continue to have a short-term rally, but… if we look at the global economy, contraction is on the way, corporate earnings are coming down sharply," independent strategist Bob McKee said on CNBC.

Still, some stocks for major banks were likely to regain some of Monday's steep losses as investors sort through a slew of news on how the institutions are handling the crisis in the industry.

Goldman Sachs is likely to report a net loss of as much as $2 billion for the fourth quarter, according to a report in the Wall Street Journal.

The quarterly loss, equivalent to about $5 a share, will be Goldman's first ever as a public company, as it faces writedowns on everything from private equity to commercial real estate, the paper said.

While Goldman's shares tumbled nearly 17 percent Monday, they recovered somewhat Tuesday and were indicating a 1.5 percent gain in premarket trading.

JPMorgan Chase said late on Monday it will eliminate about 9,200 jobs at the former Washington Mutual, which on Sept. 25 became the largest U.S. bank to fail, while Bank of America is likely to cut 10,000 investment banking jobs when it integrates the businesses of Merrill Lynch , CNBC has learned.

JPMorgan shares gained 2.2 percent premarket while Bank of America rose more than 5 percent.

In corporate news, shares of CNBC parent General Electric were 2 percent before the bell up ahead of an update on its finance arm.

The Big Three automakers have to win Washington lawmakers' hearts to get federal aid and they may have to trim the number of brands in the business plans they give to Congress, the New York Times reported.

The latest auto sales data are expected later in the day.

Also in the auto sector, Toyota Motor said it will cut management bonuses by 10 percent, amid reports that it will halt production for two days at some plants at the end of this month.

In earnings, office supply retailer Staples reported a 43 percent drop in quarterly profit due to restructuring charges, the acquisition of Corporate Expense and a lawsuit settlement. But excluding those charges the company earned a 42-cent per share profit, narrowly beating analyst estimates.

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posted a net loss from continuing operations of $475.2 million, or $12.32 a share, for its fiscal fourth quarter, ended Sept. 30. That compared with a year-ago loss of $152 million, or $3.95 a share.

The net loss in the quarter rose to $12.29 a share, from a year-ago loss of $4.03 a share, the company said in a statement. Analysts surveyed by First Call were expecting a loss of $2.10 a share.

And Treasury Secretary Henry Paulson will speak at 11:30 am New York time on the economic dialogue between the U.S. and China.