(By Salman - iStockAnalyst Writer)
US stock futures retreated sharply on Monday after troubled insurer AIG posted record quarterly losses and reached a revised deal with the US government, under which it will receive $30 billion capital to survive the worst crisis in decades.
At 8:31 am ET, Standard & Poor's 500 Index futures fell 16.30 points to 717.90. Dow Jones Industrial Average futures slumped 112 points to 6940. Nasdaq Composite Index futures dropped 19 points to 1098.
According to Commerce Department, consumer spending climbed 0.6% in January, better than the 0.4% increase expected by economists. Personal income rose 0.4%. Economists had expected personal income to decrease 0.2% in the month.
American International Group Inc (NYSE: AIG) reported a fourth quarter loss of $61.7 billion or $22.95 a share- the biggest in corporate history of US. The troubled insurer posted a loss of $5.29 billion in prior year quarter. Meanwhile, the Treasury Department and the Federal Reserve Board announced on Monday revised rescue deal for the embattled company under which it will receive further $30 billion from the government.
Shares of financials retreated before the opening bell on renewed concerns about the health of the financial system.
Early on Monday, PNC Financial Services Group Inc. (NYSE: PNC) announced that it would slash the quarterly dividend on its common shares to 10 cents from 66 cents.
Echostar Corp. (NASDAQ: SATS) posted a fourth-quarter loss of $690 million, or $7.73 a share, compared to a loss of $45 million, or 51 cents a share in the year ago quarter. Revenue jumped to $496 million from $361 million.
Chipmaker Spansion Inc (NASDAQ: SPSN) on Sunday filed for bankruptcy protection in a U.S. court.
On the front of economic data, January's construction spending and ISM index for the month of February are scheduled for release at 10:00 am ET.
European stocks retreated in afternoon trade. At 13:18 pm London time, the U.K. FTSE slipped 140.75 points or 3.67% to 3,689.34. The German DAX and French CAC declined 2.59% and 3.40% respectively.
Asian stocks finished with steep losses. The Nikkei 225 plunged 288.27 points or 3.81% to 7,280.15. The Hang Seng index of Hong Kong tumbled 494.11 points or 3.86% to 12,317.46.
Disclosure: Author does not own any of the stocks discussed here.
