Stock futures dip ahead of auto sales data
By MADLEN READ
AP Business Writer
NEW YORK (AP) – Wall Street proceeded warily into the first full week of 2009, heading for a lower opening Monday ahead of readings on auto sales and construction spending.
Some caution was to be expected after investors on Friday sent the Dow Jones industrial average soaring to a two-month high. Still, they remain hesitant about pouring more money into the battered market, given that economic data keeps coming in extremely weak.
Economists anticipate that the Commerce Department on Monday will report another sharp drop in construction spending for November, and that automakers will report further declines in December vehicle sales.
Investors are hopeful, but not yet certain, that the market’s strength over the past several sessions can continue once the majority of market participants return from their holiday vacations.
“We had a good tone coming out of the year,” said Richard E. Cripps, chief market strategist for Stifel Nicolaus, but “not all participants were involved.” The end-of-year moves higher, he said, appeared to be driven more by technical factors – such as locking in losses for tax purposes – than real confidence in the market.
What’s important is “the quality of the buying,” Cripps said. “Will we see some sustainable, bigger moves out of risk averse assets?”
Dow Jones industrial average futures fell 57 points, or 0.64 percent, to 8,901. Standard & Poor’s 500 index futures fell 7.30 points, or 0.79 percent, to 918.10, and Nasdaq 100 index futures fell 8.00 points, or 0.64 percent, to 1,245.00.
On Friday, the Dow shot up more than 250 points to its first close above 9,000 in two months. Last week, all the major indexes gained more than 6 percent.
Bond prices pulled back in premarket trading Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.50 percent from 2.39 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.09 percent from 0.07 percent.
The dollar was mostly higher against other major currencies, while gold prices fell.
Crude oil prices fell 41 cents to $45.93 a barrel in premarket electronic trading on the New York Mercantile Exchange.
In other news, Apple Inc. is expected to unveil new products at Macworld in San Francisco. In a public letter released Monday, Apple CEO Steve Jobs acknowledged his recent weight loss, and said his doctors believe he has a hormone imbalance. Jobs said he will continue as Apple’s CEO during his recovery.
Meanwhile, the House Financial Services Committee is holding a hearing on Bernard Madoff. Madoff, former chairman of the Nasdaq stock market, is the investor accused of what could end up being the largest Ponzi scheme in U.S. history.
In Asian trading, Japan’s Nikkei stock average rose 2.07 percent, and Hong Kong’s Hang Seng index rose 3.46 percent. In afternoon trading in Europe, Britain’s FTSE 100 fell 0.31 percent, Germany’s DAX index fell 0.14 percent, and France’s CAC-40 fell 0.36 percent.
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