(By Salman - iStockAnalyst Writer)US Stock futures retreated sharply on Monday, as Credit Crisis deepened, even as US House of Representatives approved massive $700 billion bailout plan on Friday. A sharp selloff in global equity markets also weighed heavily upon stock futures on Monday.
At 8:27 am ET, Standard & Poor's 500 Index futures expiring in December dropped 26.30 points to 1082.Dow Jones Industrial Average futures fell 203 points to 10161. Nasdaq Composite Index futures lost 34.75 points to 1442.75. At 13:38 London time, Europe's Dow Jones Stoxx 600 Index was down 12.67 points (-4.85%) to 248.76.
Figures released by US department of labour on Friday showed that employers slashed 159,000 jobs in the U.S. in September. Unemployment rate too remained steady at 6.1%. The figures further triggered recession fears among investors. The passage of bailout plan didn’t help much in restoring the investor confidence either as outlook for US economy remains gloomy.
There has not been much improvement on the front of Money markets, which still remains frozen. According to the British Bankers' Association, the London interbank offered rate, or LIBOR, that banks charge each other for overnight dollar loans rose 37 basis points to 2.37% on Monday. The three-month rate stayed near the highest level since January. The Libor-OIS spread, the difference between the three-month dollar rate and the overnight indexed swap rate, rose to 298 basis points today, before retreating to 290 basis points.
European and Asian markets plummeted on Monday. At a meeting in Paris on Saturday, top E.U. leaders - French President Nicolas Sarkozy, German Chancellor Angela Merkel, British Prime Minister Gordon Brown and Italian Prime Minister Silvio Berlusconi -- failed to come up with a comprehensive pan-European bailout plan, along the lines of US. At a news conference following the meeting Saturday Sarkozy said "Each government will act in its own way, but will have to coordinate with others".
At 13:50 pm, London time, UK FTSE and French CAC tumbled 5.01% and 5.60% respectively while German DAX shrank 5.03%. Asian markets settled deep in the red. Tokyo's Nikkei 225 index fell 4.25%, to 10473.09, its lowest level in 4 1/2 years. Hong Kong's Hang Seng index dropped 4.97%. Indonesia's benchmark index sank 10%, its biggest one-day drop ever. Russia's Micex Index, denominated in ruble fell as much as 17%, before trading was halted. The dollar-denominated RTS index dropped 14.25%. Chinese, Australian, South Korean, Indian and Singaporean equity markets also retreated sharply.
Citigroup (C) shares subtracted 4% in pre market trade.
Dallas Fed President Richard Fisher and Chicago Fed President Charles Evans both are due to speak on the U.S. economy on Monday. Federal Reserve Chairman Ben Bernanke is due to speak on Tuesday.
Eli Lilly & Co. (LLY) announced on Monday that it is acquiring ImClone Systems Inc. (IMCL) for $70 a share in cash, or about $6.5 billion.
The Hartford announced that expects a net loss for the third quarter in the range of $8.50 to $8.80 per share, including net realized capital losses in the range of $7.05 to $7.25 per share, or approximately $2.1 billion to $2.2 billion. The insurer said it's going to get a $2.5 billion investment from Allianz (AZ) as it cut its dividend.
Deutsche Bank downgraded Coca-Cola Co. (KO) to hold from buy.
At 8:28 am ET, NYMEX Crude oil for November delivery fell as much as $4.99 (5.3%) to $88.89 a barrel.
Dollar rallied against Euro before the opening bell.
Disclosure: Author does not own any of the stocks discussed here.
