U.S. stock index futures failed to match the buoyant mood across the country Tuesday as concerns over the weakening economy remained despite the inauguration of President-elect Barack Obama.
Expectations for the Obama administration are running high in the face of the deepening recession, questions over the use of TARP funds, the bailout of the big three automakers and more.
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“He still has huge issues to deal with,” Manus Cranny, head of binaries at MF Global, told “Worldwide Exchange.” Cranny didn’t rule out an “Obama bounce,” even though the futures were negative.
Troubles continued for the banking sector, with State Street tumbling more than 37 percent in premarket trading after it reported rising unrealized losses in its commercial paper program and investment portfolio along with lower fourth quarter profit.
Boston-based State Street, the world's biggest institutional asset manager, said Tuesday net income was $65 million, or 15 cents per share, compared with $223 million, or 57 cents per share, a year earlier. Analysts had expected 58 cents.
Also, Johnson & Johnson shares fell more than 2 percent premarket after the Dow component narrowly beat Wall Street expectations but said revenues would be flat in 2009.
The diversified healthcare company earned $2.71 billion, or 97 cents per share, compared with $2.37 billion, or 82 cents per share, a year earlier. Excluding special items, J&J earned 94 cents per share, against analyst expectations of 92 cents per share.
Investors returning from the three-day break will have to digest another wave of bad news for European financials and a second round of stimulus from the UK government.
In corporate news, Mexican billionaire Carlos Slim will invest $250 million intoThe New York Times . Slim, one of the world's richest men, will become one of the newspaper publisher's largest shareholders.
Meanwhile, consolidation in the auto sector looked on the cards as Italian auto-maker Fiatwill take a 35 percent stake in Cerberus-ownedChrysler, but will not inject cash in the troubled automaker.
Concerns over the big banks remained at the forefront after a Financial Times report stated Bank of America may slash as many as 4,000 jobs in its capital markets units.
American International Group’sChief Investment Officer Win Neuger will step down, according to Wall Street Journal. Neuger will move to a different role within the insurance giant, the report said.