New York: Wall Street headed for a lower open on Friday after industrial conglomerate General Electric Co reported a disappointing profit and lowered its earnings forecast for the year, stirring recession fears.
Shares of GE slumped more than 10 per cent to $33 after the company reported a 6 per cent decline in earnings as a slowdown in the economy and the credit crisis hit the company's financial, industrial and health-care units.
"It's not going to be pretty at the open. Friday is a particularly bad day to bring up nasty news," said James Hardesty, president at Hardesty Capital Management in Baltimore. "Traders don't want to carry into the weekend and they'll act accordingly."
S&P 500 futures SPc1 were down 9.3 points, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures DJc1 fell 75 points, and Nasdaq 100 NDc1 futures lost 8.75 points.
The GE news hurt stocks in Europe as well. The FTS Eurofirst 300 index of top European shares fell by 1 per cent, Engineering company Siemens of Germany was among the biggest losers, down 3 per cent.
The sharpest drop in GE's profit came at its financial divisions, dragging down shares of some U.S. banks in trading before the open. Citigroup's stock fell more than 1 per cent.
Other recent gloomy earnings from U.S. companies have contributed to fears the economy is heading for or is already in a recession.
United Parcel Service Inc, the world's largest package delivery company, forecast weak first-quarter earnings. Aluminum producer Alcoa Inc said its quarterly profit was cut in half due to higher energy costs and a weak dollar. Advanced Micro Devices gave a revenue estimate below expectations and said it would cut its work force.
Investors will take the pulse of the U.S. consumer at 9:55 a.m. (1355 GMT) when the Reuters/University of Michigan Surveys of Consumers will be released. The preliminary April reading of the sentiment index is forecast to slip to 69 from 69.5.
Monthly sales results from retail chains released on Thursday suggested that shoppers are wary of recession and have cut back on their discretionary spending.
Shares of GE slumped more than 10 per cent to $33 after the company reported a 6 per cent decline in earnings as a slowdown in the economy and the credit crisis hit the company's financial, industrial and health-care units.
"It's not going to be pretty at the open. Friday is a particularly bad day to bring up nasty news," said James Hardesty, president at Hardesty Capital Management in Baltimore. "Traders don't want to carry into the weekend and they'll act accordingly."
S&P 500 futures SPc1 were down 9.3 points, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures DJc1 fell 75 points, and Nasdaq 100 NDc1 futures lost 8.75 points.
The GE news hurt stocks in Europe as well. The FTS Eurofirst 300 index of top European shares fell by 1 per cent, Engineering company Siemens of Germany was among the biggest losers, down 3 per cent.
The sharpest drop in GE's profit came at its financial divisions, dragging down shares of some U.S. banks in trading before the open. Citigroup's stock fell more than 1 per cent.
Other recent gloomy earnings from U.S. companies have contributed to fears the economy is heading for or is already in a recession.
United Parcel Service Inc, the world's largest package delivery company, forecast weak first-quarter earnings. Aluminum producer Alcoa Inc said its quarterly profit was cut in half due to higher energy costs and a weak dollar. Advanced Micro Devices gave a revenue estimate below expectations and said it would cut its work force.
Investors will take the pulse of the U.S. consumer at 9:55 a.m. (1355 GMT) when the Reuters/University of Michigan Surveys of Consumers will be released. The preliminary April reading of the sentiment index is forecast to slip to 69 from 69.5.
Monthly sales results from retail chains released on Thursday suggested that shoppers are wary of recession and have cut back on their discretionary spending.
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