Updated from 8:46 a.m. EDT
The U.S. stock market opened with a whimper of fear Friday as continued jitters about
and another deal in the chemicals space.
Dow Jones Industrial Average
shed 143 points to 11,086, and the
was stumbling 13 points at 1240. The
slumped 33 points to 2225.
Weighing heavily on sentiment were Fannie and Freddie, the government-sponsored mortgage buyers whose shares have been under severe pressure for most of the week. The latest cause for worry was speculation that the federal government would be forced to step in to secure their financial health.
Shares of Fannie and Freddie were lately in free fall, each losing nearly half their value to $13.20 and $8 respectively.
Fears about Fannie and Freddie were relegating the quarterly report from GE to the back burner. GE posted a quarterly profit of 54 cents a share and met estimates, while revenue climbed 11% to $46.9 billion. GE also said it would sell its Japanese consumer finance business to Shinsei Bank for $5.4 billion.
Also keeping the buyers sidelined was a record high for oil, whose price this week has traversed a wide range. After falling $10 in two days, crude has now rebounded to new record highs, recently trading up $4.89 at $146.54 in New York. Gold was gaining $19.90 at $961.90.
For the second time in two days, a deal is taking place in the chemicals sector. A day after
said it would buy
Rohm & Haas
in a pact worth nearly $19 billion, including debt,
for more than $3 billion.
The Wall Street Journal
reported that Belgium's InBev is lifting its takeover proposal for
by $5 to $70 a share after the U.S.-based maker of Budweiser said it wasn't interested in the early $46 billion offer.
After the market closed yesterday, energy-patch denizen
forecast an encouraging second-quarter profit. The company said that oil production profits would compensate for losses in its refining business.
In the financial sector,
of France offered $7.7 billion for
German retail operations. If regulators clear the agreement, the sale could close in the fourth quarter.
Throughout the session, investors will likewise be watching another harried financial firm,
, which sank Thursday on rumors that trading partner Pimco was reducing its exposure to Lehman because of liquidity worries. A Pimco spokesman later denied the rumor.
began permitting consumers to buy its highly anticipated 3G iPhone this morning.
Away from stocks, long-dated Treasuries were falling as investors contemplated the government's role in a potential Fannie-Freddie bailout. The 10-year was shedding 6/32 in price, yielding 3.82%, and the 30-year was losing 7/32 to yield 4.42%. The dollar was falling against the yen, euro and pound. The dollar index, which measures the dollar against a basket of foreign currencies, was dropping 0.9% at 71.83.
As for data, the Commerce Department reported that the U.S. trade deficit slimmed by 1.2% in May to $59.8 billion from $60.5 billion in May. Analysts were expecting the deficit to broaden to $62.2 billion.
June U.S. export prices, excluding agriculture, rose 0.9% in June, while import prices, subtracting oil, rose 0.3%, according to the Bureau of Labor Statistics. A consumer sentiment survey from the University of Michigan is due later this morning.
Overseas, action was mixed. Hong Kong's Hang Seng was gaining, while Frankfurt's DAX, London's FTSE and Japan's Nikkei were slipping.