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Stock Futures Point to Further Wall Street Losses

The Associated Press

NEW YORK -- Wall Street appeared ready to extend its losses Tuesday as investors already uneasy about weak corporate profit reports awaited a reading on overseas demand for U.S. products.

The Commerce Department will release monthly trade data for November at 8:30 a.m. EST. Wall Street expects the U.S. trade deficit narrowed significantly as oil prices fell. U.S. imports of other products are also expected to have fallen in November, reflecting the deepening recession. But at the same time, spreading weakness overseas has sharply curbed demand for American exports, which until recently had been the one bright spot for the U.S. economy.

Underscoring the pain American manufacturers are feeling, aluminum giant Alcoa(AA Quote) reported late Monday that it lost $1.2 billion during the fourth quarter as demand for aluminum plunged. Other companies also are warning that their results are being hit hard by the recession.

Investors remain on edge as more companies prepare to report earnings over the next few weeks. Investors are watching closely for companies' expectations for business conditions in 2009.

The market will get an earlier-than-expected reading on the financial sector this week when JPMorgan Chase (JPM Quote)reports earnings on Thursday, nearly a week ahead of its original schedule. Investors are fearful of another year of multibillion dollar losses among financial companies.

Meanwhile, Citigroup(C Quote) and Morgan Stanley (MS Quote) are expected to announce a deal as soon as Tuesday or Wednesday to combine their brokerage operations as Citi struggles to raise additional cash.

Ahead of the market's open, Dow Jones Industrial Average futures fell 66, or 0.8%, to 8,378. S&P 500 index futures fell 8.80, or 1.01%, to 859.30, while Nasdaq 100 index futures fell 13, or 1.08%, to 1,193.

On Monday, stocks fell for the fourth session in a row on fear that corporate profit reports will signal a recovery in the economy is further off than originally anticipated. The Dow shed 125 points, and broader stock indexes fell more than 2%. The market's decline Monday followed its worst week since November. However, stocks are still up sharply from their late November lows.

Bond prices slipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose slightly to 2.32% from 2.31% late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.08% from 0.06% late Monday.

The dollar rose against other major currencies, while gold prices fell.

Light, sweet crude fell $1.17 to $36.42 in electronic premarket trading on the New York Mercantile Exchange.

Asian markets retreated sharply, hurt by reports that Sony(SNE Quote) is sinking into its first yearly operating loss in 14 years as sales fizzle for digital cameras, flat-panel TVs and other gadgets. Japan's Nikkei stock average fell 4.8%. Hong Kong's Hang Seng index dropped 2.2%.

In late morning trading, Britain's FTSE 100 was down 2.3% and Germany's DAX index was down 2.4%.