Stocks set for lower open
Futures slip as economic concerns mount; Paulson heads to Capitol Hill while voters go to polls for Super Tuesday.
U.S. stock futures pointed lower Tuesday as mounting economic worries took a toll on overseas markets and investors eyed a light economic calendar.
About three hours before the market open, Nasdaq and S&P futures were little changed, with a comparison to fair value indicating a week start for Wall Street.
Stocks slumped Monday amid downgrades of several financial sector stocks and as investors pulled back from a big rally.
Investors may stay on hold Tuesday as they await Super Tuesday primary results, when voters in 24 states go to the polls in voting that could help determine the Republican and Democratic presidential nominees.
The economic calendar is fairly light, which may lead to volatile trading. The Institute for Supply Management releases its services index at 10 a.m. ET. Meanwhile, Treasury Secretary Hank Paulson heads to Capitol Hill to defend the $3 trillion federal budget the White House has proposed.
In earnings news, Rupert Murdoch's News Corp. (NWS, Fortune 500) posted results late Monday about in line with analysts' estimates. Murdoch also said the company is not considering a bid for Internet giant Yahoo (YHOO, Fortune 500). Microsoft (MSFT, Fortune 500) has offered Yahoo $45 billion in an unsolicited bid. Yahoo's board has yet to respond.
Yahoo shares were downgraded to "hold" from "buy" late Monday by Soleil and early Tuesday by Bank of America. Shares of Yahoo gained another 3.4% in Monday trading, taking them to $29.33, just below the $31 offer price from Microsoft.
Medical device maker Boston Scientific (BSX, Fortune 500) also reported results after the market close Monday. The company said it swung to a net loss of $458 million in the latest quarter, but earnings excluding items beat forecasts and the company raised first quarter guidance, which lifted its shares as much as 7% in after-hours trading.
Walt Disney is due to report quarterly results after the market close.
Credit rating agency Moody's (MCO) is considering a new way of rating mortgage-backed securities other sometimes-volatile structured finance vehicles, a move seen as an effort to rehabilitate its reputation by acknowledging that the system it used to rate billions of dollars was flawed. Shares of Moody's gained nearly 1% in after-hours trading following the announcement.
World markets took a cue from Wall Street's weak session. Asian stocks mostly finished lower, as the Australian central bank raised interest rates and Toyota Motor (TM) reported one of its smallest profit gains in years, as the weak dollar hurt its U.S. revenue. The U.S. is the largest market for its vehicles.
European shares slipped in morning trading. BP (BP) reported a smaller than forecast 53% rise in earnings.