Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

US stocks head for lower open after rebound

Send a link to a friend

[October 01, 2008]  NEW YORK (AP) -- U.S. stocks headed for a lower open Wednesday, indicating stocks could extend this week's gyrations as investors prepare for a possible Senate vote on the government's proposed $700 billion financial sector bailout.

Stocks fell sharply Monday after the House surprised Wall Street by rejecting the plan but the market then staged a partial rebound Tuesday on hopes party leaders would find the votes to pass the measure.

Champions of the plan say it is necessary to absorb the soured mortgage and other debt from banks' books to restore faith in the credit markets. Nervousness about the debt has made banks hesitant to extend loans to one another as well as to businesses and consumers.

A drop in loanmaking makes it harder for the economy to grow; the fear paralyzing the credit markets is making it extremely difficult and more expensive for companies to fund their day-to-day operations, putting basics like payroll and purchasing at risk.

The House's rejection of the measure came after detractors said the plan was too costly and was unnecessary.

Credit markets remain tight, however, and a key rate that banks charge to lend to one another shot higher Tuesday. The rise in the London Interbank Offered Rate, or LIBOR, underscores the anxiety gumming up the world's financial gears.

The plan is headed for a Senate vote Wednesday night. Leaders there surprised some observers Tuesday by adding tax breaks for businesses and the middle class and increasing deposit insurance.


Financial markets likely will remain nervous until the votes on Capitol Hill are complete. Dow Jones industrial average futures fell 99, or 0.91 percent, to 10,762. The Dow fell nearly 778 points Monday then rallied 485 points Tuesday.

Standard & Poor's 500 index futures fell 14.00, or 1.20 percent, to 1,155.00, and the Nasdaq 100 index futures fell 19.00, or 1.18 percent, to 1,585.50.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.77 percent from 3.83 percent late Tuesday. Yields on short-term Treasury debt remain very low by historical measures, particularly when compared to lending rates between financial institutions; that indicates intense demand as investors seek a safe place, even with little or no return, to put their money.

[to top of second column]


Beyond monitoring the course of the bill, investors also will looking for reports due after the opening bell on construction spending and manufacturing.

Wall Street expects the Commerce Department to report construction spending declined in August. Economists polled by Thomson/IFR predict that construction spending will fall by 0.5 percent following a 0.6 percent decline in July.

Also, The Institute for Supply Management, a trade group of purchasing executives, is expected to report that its manufacturing index declined to 49.5 last month, according to Thomson/IFR. Investors will be looking to determine whether export sales are continuing to show recent strength.

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

Overseas, Japan's Nikkei stock average rose 0.96 percent. In morning trading, Britain's FTSE 100 rose 0.72 percent, Germany's DAX index fell 0.65 percent, and France's CAC-40 slipped 0.14 percent.


On the Net:

New York Stock Exchange: http://www.nyse.com/

Nasdaq Stock Market: http://www.nasdaq.com/

[Associated Press; By TIM PARADIS]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


< Recent articles

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor