Futures Gain Ahead of Bush Auto Speech

U.S. stock index futures pointed to a cautiously higher open for Wall Street on Friday as hopes persisted for an automaker bailout and a basket of major financial institutions faced downgrades.

President Bush is planning a speech on the automakers at 9 am, the announcement of which led to a modest gain in futures.

While futures were indicating lower in the aggregate they were well above fair-value levels, which often leads to a higher open.

Oil tumbled another 5 percent, dropping $2 to below $34 a barrel. That led to continued pressure on the shares of leading energy producers, with BP down more than 5 percent and Dow component ExxonMobil off nearly 1 percent in premarket trading.

Banks also were a drag on the market as Standard & Poor's cut its rating or outlook on 12 major financial institutions in the US and Europe.

Among those hit were Goldman Sachs , which dropped 1.6 percent, along with Bank of America and Citigroup, both of which edged lower premarket. S&P said the downgrades reflected the difficult economic environment.

The market also is looking at a quandruple witching Friday, which means the expiration of options and futures contracts across the board. Specifically, the market index, market index options, stock options and stock futures contracts each expire.

The event generally is considered ripe for volatility as traders unwind positions and purchase other contracts as hedges.

General Motors and Chryslerare reportedly close to securing emergency loans from the government's aid package, but this would demand major restructuring at the automakers, according to Reuters.

Meanwhile, bond fund Pimco turned down a debt-exchange offer from GMAC, threatening the company's bid to qualify for U.S. government funds, the Wall Street Journal reported.

In earnings news, Oracle reported after the closing bell Thursday a profit excluding one-time items that rose 8 percent and was in line with estimates. BlackBerry maker Research in Motion reported earnings of 83 cents a share, also in line with estimates, but shares of both companies were lower ahead of the market open.

In a new twist in the Madoff saga, Irving Picard, the court-appointed trustee for the liquidation of Bernard L Madoff Investments Securities, hired Lazard Freres to help sell the trading operations of Madoff's company, according to the firm's Web site.

And a former Lehman Brothers salesman was charged with insider trading after he tipped friends and relatives with inside information about 13 impending mergers by divulging confidential information he got from his wife, a public relations executive.

Asian stocks trimmed gains after the Bank of Japan slashed rates to 0.10 percent, while European shares were down 2 percent in mid-morning trade.