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5-Day Forecast
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 The McClatchy Co. |
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Tuesday, January 6, 2009
24-Hour News Business |
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Stock futures fall, awaits Fed decision
By LESLIE WINES -- AP Business Writer (Published January 29‚ 2008) NEW YORK (AP) Stocks headed for a moderately lower opening Wednesday, with investors unlikely to make bold moves ahead of a widely expected interest rate reduction by the Federal Reserve. The market has been banking on a new rate cut to be announced Wednesday afternoon, following the central bank's drastic 0.75 percentage point reduction in the key federal funds rate a week ago. The only uncertainty in investors' minds is whether the Fed will put in place a sizable 0.50 percentage point cut or more cautiously order a 0.25 percentage point cut. The fed funds rate is what banks charge each other for overnight loans. A larger cut would show central bankers remain concerned about stimulating a flagging economy. A smaller move would point to continuing nervousness about inflation. Ahead of the opening, the futures contract for the Dow Jones industrial average fell 32 points, or 0.39 percent, to 12,439. The Standard & Poor's 500 futures contract dropped 5.40 percent, or 0.40 percent, to 1,356.70 as the Nasdaq 100 contract declined 10.5 points, or 0.60 percent, to 1,801.5. Treasurys were slightly higher, sending yields lower. The yield on the 10-year benchmark note stood at 3.66 percent, down from 3.68 percent late Tuesday. The fourth-quarter report on gross domestic product is due at 8:30 a.m. Eastern time. The nation's economic growth is expected to have slowed in the period to a 0.8 percent annual pace, down from 1.2 percent in the third quarter, according to a poll of economists by Thomson/IFR. Swiss bank UBS said it will have a $11.4 billion fourth-quarter loss, largely due to subprime problems. Analysts had expected a much smaller shortfall. French bank BNP Paris Wednesday said its quarterly profit will decline by 40 percent from year-earlier levels. Shares of Yahoo Inc. fell $2.11, or 10.1 percent, in premarket trading. The struggling internet company Tuesday announced a decline in quarterly profit and unveiled a sales outlook for this year that fell below analysts' expectations. There are new earnings from some components in the Dow Jones industrial average. Boeing Co. Wednesday raised its projection for its 2008 earnings to $5.85 a share, up from a prior forecast of $5.70. The company's fourth quarter earnings exceeded Wall Street expectations. Merck & Co. Inc. took a fourth-quarter loss due to special charges, including a settlement costs for withdrawing Vioxx, a drug for arthritis. But its earnings excluding special costs beat estimates of Thomson Financial analysts. Overseas markets fell ahead of the U.S. rate decision. In Tokyo the Nikkei fell 0.99 percent. In Europe, London's FTSE 100 dropped 0.58 percent by midday, France's CAC 40 lost 0.39 percent and Frankfurt's DAX gave up 0.58 percent. |
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