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Futures Point Higher Following Wall Street Selloff

Mike Taylor

Premarket futures were forecasting a higher open for stocks in the U.S. Tuesday, following a massive selloff in the previous session, during which each of the three major averages lost at least 7.7%.

Futures for the S&P 500 were up 16 points at 832, and were 16 points above fair value. Nasdaq futures were adding 17 points at 1111 and were 20 points ahead of fair value.

During the previous outing, stocks sold off sharply as the National Bureau of Economic Research declared the U.S. had been in a recession for nearly a year. The first session of the month also was occasion for profit-taking following a five-day rally that capped off November.

At Monday's close, the Dow Jones Industrial Average had lost 679.95 points, or 7.7% to 8149.09, and the S&P 500 fell 80.03 points, or 8.9%, to 816.21. The Nasdaq sank 137.50, or 9%, to 1398.07.

Ahead of the new session, industrial titan General Electric (GE Quote) narrowed its fourth-quarter earnings-per-share projection to between 50 cents and 52 cents from a previous target of 50 cents to 65 cents. The company also affirmed its intention to maintain its $1.24 per share dividend in 2009.

As trading gets underway, investors will be closely watching General Motors (GM Quote), Ford (F Quote) and Chrysler. Chief executives from the automakers are slated to appear before Congress with detailed plans that show their businesses still warrant a federal bailout.

Last time the Big Three's CEOs traveled to Washington, lawmakers refused them the $25 billion they sought and berated them for, among other things, flying to the hearing on private jets.

While the automakers petition the government, the United Auto Workers union is reportedly planning an emergency meeting to discuss ways to help their employers secure emergency funds. Automakers also are expected to roll out their November sales figures later in the day.

Elsewhere, a union of engineers for aerospace firm Boeing (BA Quote) ratified new contracts with the company. The deal covers more than 20,000 workers. Earlier this year, Boeing faced production delays and reduced earnings when its machinists union elected to strike.

Among financial companies, The Wall Street Journal reported that Goldman Sachs (GS Quote) would post a $2 billion loss for the most recent quarter.

Several big technology names were also making headlines. Intel (INTC Quote) and Hitachi (HIT Quote) announced plans to collaborate on development of solid-state drives for servers.

Taiwan Semiconductor (TSM Quote) reduced its fourth-quarter revenue forecast, citing a weakening global economy and slackening demand.

In earnings news, Beazer Homes posted a fourth-quarter loss that tripled from a year ago. Similarly, department-store operator Sears Holdings (SHLD Quote) announced a wider-than-expected third-quarter loss.

Office supplier Staples (SPLS Quote) said its third-quarter earnings declined 43% on restructuring charges.

Several analyst actions were looking to set certain stocks in motion. Morgan Stanley cut its earnings estimates for credit-card company Visa (V Quote), and Barclays reduced its earnings forecast for General Dynamics (GD Quote).

In the commodities arena, crude oil was higher by 22 cents to $49.50 a barrel. Gold was shedding $5.20 to $782 an ounce.

Longer-dated U.S. Treasury securities were falling in price. The 10-year was down 10/32 to yield 2.76%, and the 30-year was lower by 1-6/32, yielding 3.27%. The dollar was falling vs. the euro and pound but rising against the yen.

Overseas, European markets, such as the FTSE in London and the DAX in Frankfurt, were marking gains. In Asia, both Japan's Nikkei and Hong Kong's Hang Seng finished with losses.