U.S. to Open Lower as Credit Crisis Spreads

The credit crisis had spread beyond America into Europe and Asia. Stocks fall hard overseas.
Publish date:

Premarket futures were pointing at a lower open of U.S. stocks Monday, as it became apparent that the credit crisis had spread beyond America into Europe and Asia.

Futures for the

S&P 500

were down 34 points at 1074 and were 30 short of fair value.


futures were 46 points lower at 1432 and were 51 below fair value.

In a sign of a global financial crunch, leaders from France, Germany, Italy and the U.K. met Saturday and agreed to coordinate efforts to prevent failures in Europe's financial system.

On Sunday, a scramble ensued to help troubled institutions. Germany rescued lending company

Hypo Real Estate

, and France's

BNP Paribas

said it would take over Benelux bank

Fortis NV


Back in the U.S.,

Wells Fargo

(WFC) - Get Report

said it intended to go ahead with its purchase of


(WB) - Get Report

. Wells Fargo said an appeals court vacated a ruling that extended an exclusivity agreement between


(C) - Get Report

and Wachovia.


The Wall Street Journal

said that Treasury Secretary Henry Paulson would appoint advisor Neel Kashkari to supervise the $700 billion bailout program for the financial system. Paulson's proposal passed the House of Representatives and was signed by President Bush on Friday.

On Monday,

Bank of America

(BAC) - Get Report

announced it would modify about 400,000 mortgages to help borrowers who had taken out loans from

Countrywide Financial

, which BofA acquired on July 1.

Outside the financials,


reported that



agreed to a merger with

Eli Lilly

(LLY) - Get Report


In the commodities space, the price of crude oil was down $3.81 to $90.07 a barrel, and gold was climbing $12.40 to $845.60 an ounce.

Longer-term U.S. Treasury securities were climbing in price. The 10-year was up 28/32 to yield 3.5%, and the 30-year was climbing 1-17/32, yielding 4%.

Overseas markets were broadly falling. The FTSE in London and the Dax in Frankfurt were each down more than 5.8%. Asian exchanges, including Japan's Nikkei and Hong Kong's Hang Seng, closed on the downside.