Updated from 6:59 a.m. EDTPremarket futures were hinting at a lower open for stocks on Wall Street Tuesday, as investors awaited further news on the government's historic bailout of the U.S. financial markets. Futures for the S&P 500 were down 6.5 points at 1207 and were 1.8 points short of fair value. Nasdaq futures were lower by 3 points at 1667 and were 8.8 points below fair value. On Monday, stocks suffered heavy losses as traders attempted to assess the impact of Treasury Secretary Henry Paulson's sweeping bailout of financial firms. Paulson's $700 billion plan would create a government institution to buy from banks the bad debt at the core of the credit crisis. Although the plan is a welcome boon to many investment firms with hard-to-value securities on their balance sheets, fear remains that the massive government-spending increase will drive up interest rates and weaken the dollar as new government debt floods the market. Later Tuesday, Paulson and Federal Reserve Chairman Ben Bernanke are set to appear before the Senate to discuss the bailout plan. Meanwhile, brokerages Goldman Sachs ( GS) and Morgan Stanley ( MS) over the weekend agreed to become bank holding companies. Many have speculated about whether the big brokerages, following their transformation, will buy small regional banks to build a base of retail deposits. Following an $85 billion emergency loan from the Federal Reserve, insurance firm AIG ( AIG) said it was preparing a list of properties it would sell as part of its effort to repay the government. As for corporate earnings, homebuilder Lennar ( LEN) reported a fiscal third-quarter loss that narrowed year over year on sharply declining revenue.
On the merger front, Bristol-Myers Squibb ( BMY) raised its buyout offer for ImClone ( IMCL) to $62 a share from $60 a share. Over in commodities, the price of crude oil was off $1.77 to $107.60. Gold was down $14.50 at $894.50. The price of longer-term U.S. Treasury securities was rising. The 10-year note was up 14/32 to yield 3.78%, and the 30-year was up 12/32, yielding 4.4%. The dollar was higher vs. the euro, yen and pound. Overseas, European markets were taking some knocks, while Asian exchanges ended mixed. The FTSE in London and the DAX in Frankfurt were lower. The Hang Seng in Hong Kong finished with a loss. Japanese markets were closed Tuesday.